Popular burger chain set to test menus that change price based on demand

It will copy the strategy used by ticket and ride-sharing companies

Wendy’s is introducing ‘dynamic pricing’

A popular burger chain in America is looking to test having the prices of its menu items fluctuate throughout the day based on demand.

Wendy’s is set to implement the strategy that has already taken hold with ride-sharing companies and ticket sellers.

During a conference call earlier this month, CEO Kirk Tanner said that the Dublin, Ohio-based burger chain will start testing dynamic pricing, also known as surge pricing, as early as next year.

“Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling,” he said.

“As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting sales and profit growth across the system.”

Wendy's Co. plans to invest about $20 million to launch digital menu boards at all of its U.S. company-run restaurants by the end of 2025. It also plans to invest approximately $10 million over the next two years to support digital menu enhancements globally.

A Wendy’s restaurant (Getty Images)

Tanner, a longtime PepsiCo executive, became Wendy's CEO earlier this month. He succeeded Todd Penegor, who had served as Wendy’s president and CEO since 2016.

Last year, Penegor announced a restructuring intended to speed decision-making and invest more in new restaurant development, particularly overseas. The chain and its franchisees operate about 7,000 restaurants worldwide.

Speaking to the Daily Mail about Wendy’s new surge-pricing initiative, George Washington University’s associate economics professor, Steven Suranovic, admitted the move could be risky for the restaurant franchise.

“They could shoot themselves in the foot by introducing something customers aren’t ready for,” he proclaimed.

Suranovic added: “Dynamic pricing enables them to take that surplus away from consumers and put it into the firm’s pocket. Ultimately, the biggest losers would be lunchtime customers. If people feel like they’re getting gouged, they’re not going to take kindly to this dynamic pricing strategy.”

Shares of Wendy's fell slightly in Tuesday morning trading.