Wendy’s would like a word about the difference between “dynamic pricing” and “surge pricing.” After a flurry of attention this week to comments by CEO Kirk Tanner during the fast food chain’s February earnings call, Wendy’s now says it has “no plans” to raise prices when demand is highest.
“To clarify, Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest,” a Wendy’s spokesperson told NBC News. “We didn’t use that phrase, nor do we plan to implement that practice.”
The fast food fracas started earlier this month, when Tanner touted the coming rollout of new digital menu boards, an approximately $20 million investment that he said would extend to all U.S. restaurants the company operates by the end of next year. Tanner also highlighted how the digital menu boards would allow for pricing changes.
“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.”
His comments during the Feb. 15 quarterly earnings call attracted little notice at the time. That changed this week, with a slew of headlines (including on Quartz) that compared Tanner’s “dynamic pricing” to Uber’s well-known “surge pricing.” The ride-hailing app raises prices when demand is highest to increase the supply of drivers and minimize wait times for riders
“Dynamic pricing” is widely understood to mean changing prices as demand fluctuates to maximize revenue. But after an initial backlash from customers, Wendy’s says Tanner didn’t mean “surge pricing” when he said “dynamic pricing.” The company spokesperson told NBC there are “no plans” to raise prices at high-demand times.
“We said these [digital] menu boards would give us more flexibility to change the display of featured items. This was misconstrued in some media reports as an intent to raise prices when demand is highest at our restaurants,” the Wendy’s spokesperson said. “We have no plans to do that and would not raise prices when our customers are visiting us most.”
“Any features we may test in the future would be designed to benefit our customers and restaurant crew members,” the spokesperson sadded. “Digital menu boards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.”