They're about to test demand elasticity and find out. People are going to go elsewhere. For demand-based pricing to work the price has to be allowed go to zero or near zero. They're not going to do that. This has to be another Ivy League graduate's idea that only took one economics course. This is going to really anger people. I think I might buy puts on WEN.
Wendy's will experiment with dynamic surge pricing for food in 2025
31–40 of 83 posts
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#32It sounds like a new c-level executive just got hired and found a 'great way to increase profits'.
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#33This is not going to be well-received by their customers and is likely to send business to McDonald's and Burger King instead. They also really shouldn't be doing "suggestive selling" whether with humans or machines. Just shut up and take the customer's order rather than trying to talk them into ordering something. Nobody likes when stores or restaurants do that even if it "increases metrics" because some people choo…
My pessimistic take is this wont drive significant business to competitors and will slowly become the new standard because of the profit potential. Basically, enshittification.
Full on enshittification
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#34This has been described as similar to Uber/Lyft surging but it’s different in a few critical ways that I suspect consumers are less tolerant of. When Uber/Lyft are surging it incentivise more drivers to go to the surge area. This raises supply and the surge rate decreases. Drivers are distributed automatically where they are needed. Overall trips taken should be higher compared with a no surging model. So it shifts b…
>Fundamentally they are betting that their food demand is inelastic enough that they’ll make more money overall. That just feels more exploitative and is going to be harder to market.
To be fair I think it's less exploitive than Ubers prices surging during a terror attack..
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#35Are they going to pay their employees more during surge? I worked food industry as a teenager with a stint in fast food- it can be crazy, you get physically and mentally tired, from both moving quickly but from the increased number of angry customers. Hazard pay!
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#36This has been described as similar to Uber/Lyft surging but it’s different in a few critical ways that I suspect consumers are less tolerant of. When Uber/Lyft are surging it incentivise more drivers to go to the surge area. This raises supply and the surge rate decreases. Drivers are distributed automatically where they are needed. Overall trips taken should be higher compared with a no surging model. So it shifts b…
> Fundamentally they are betting that their food demand is inelastic enough that they’ll make more money overall. That just feels more exploitative and is going to be harder to market.
Yeah, I have no idea how they can sell this to the consumer. I have to pay more for food at supper time? Why would I want to pay for that? You're asking me to eat earlier or later to soften the demand curve, but why am I choosing fast food if I don't want convenience?
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#37[flagged]
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#38This is not going to be well-received by their customers and is likely to send business to McDonald's and Burger King instead. They also really shouldn't be doing "suggestive selling" whether with humans or machines. Just shut up and take the customer's order rather than trying to talk them into ordering something. Nobody likes when stores or restaurants do that even if it "increases metrics" because some people choo…
"I'd like to buy some fast food at a reasonable and predictable price." "Sir, this is a Wendy's."
Ironically, Wendy's was the first of the major chains to have a value menu (aka dollar menu), in 1989.
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#39Hot take -- good!
Labor is a huge component of food costs.
Labor cost per menu item is directly dependent on sales per time unit, as the labor has to be staffed regardless of sales.
Ergo, food at low-volume times (late night) should cost more.
PS: It's not as if airlines, online retail, etc. aren't already doing this. I find it hard to get outraged that one industry is different than others.
Re: Wendy's will experiment with dynamic surge pricing for food in 2025
#40Will they increase the pay of the employees who work during the surge periods proportionally to the size of the price increase?
It'll probably instead be used to dynamically start and end people's shifts, as tightly as labour laws allow.