The well-known fast-food chain Wendy’s recently stated that along with the new digital menus it will introduce in 2025 (a $20 million investment), it will experiment with dynamic pricing.
This model, which has never been applied in the restaurant industry (but will surely spread if turned out to be successful), unsettled loyal Wendy’s fans, who were dismayed by the idea of prices increasing when demand is high (surge pricing).
Therefore, one day later, Wendy’s came back and announced that it was not conveyed correctly and that: “Digital menu boards will allow us to change menu offerings at different times of the day and offer discounts and value offers to our customers more easily, particularly in the slower hours of the day. Wendy’s will not implement dynamic pricing, which is the practice of raising prices when demand is highest. This was not a change in plans. It was never our plan to raise prices when our customers are visiting us the most.”
Essentially, what the American company says is that dynamic pricing doesn't necessarily mean higher prices. Although consumers will pay more during peak hours (something Wendy’s denies), it also means they will pay less when demand is low.
Dynamic pricing uses real data to calculate where a company can set its prices. This allows companies to maximize their earnings at any given moment.