Hankering for a burger and fries? Wendy’s, home of the square beef patty and Frosty shake, has you covered. How much will your meal cost? Well, under Wendy’s new dynamic pricing, it depends on how many other people are hungry at the same time you are, and in fact, what time you’re hungry. That’s right, in theory, the price of your burger and fries could change even as you wait in line to order. Wendy’s will introduce its new pricing scheme in 2025 using a digital menu board where changes in prices can be instantly displayed.
If you’re on a budget, you might want to get your burger at less popular times, when demand is lower. During peak times, customers can expect to pay about a few cents more for their burger. While this may not seem like a lot, Wendy’s figures that when added up across all of its company owned stores, the increase in profits will be measurable. Critics of the new plan suggest that it amounts to price gouging. Wendy’s spin is that the new plan will save customers money if they buy during slow times when menu items will be available at a discount from peak prices. The burger chain is just the latest company to join the move toward dynamic pricing. The pricing strategy has been adopted by a wide range of companies from ride-share to ticket sales.
Discussion Questions:
1. Does the traditional law of supply and demand apply to Wendy’s new pricing scheme? Explain.
2. Reflect on Wendy’s new pricing scheme from the perspective of different stakeholders. Who stands to benefit? Who stands to lose? In your opinion, will the new pricing strategy be successful? Why or why not?
Sources| Washington Post: https://www.washingtonpost.com/food/2024/02/27/wendys-surge-pricing-menu/; NY Times: https://www.nytimes.com/2024/02/27/business/wendys-prices-inflation.html; Today: https://www.today.com/video/wendy-s-considers-surge-pricing-will-other-fast-food-chains-follow-205002309719; Unsplash: Photo by Batu Gezer on Unsplash