What is Surge Pricing and Why is Wendy's hopping on the train

Wendy's CEO Plans to Incorporate Surge Pricing 

    As early as 2025 Wendy's CEO, Kirk Tanner, announces the introduction of surge pricing. What is surge pricing? We see it all the time, when airplanes and travel agencies change prices based on holidays and seasonal and off season deals; when Lyft and Uber change prices based on time of day, weather and other factors; when bars incorporate Happy hours as opposed to other times of day. 

    The idea is to create and even pace of revenue through out the day and eliminate the loss from less productive parts of the day. Weather this means better prices during slow periods of the day to increase sales, or price gauging at these times to increase revenue is still too be seen.  

    Tanner states “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. 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 doesn't seem to be the only one taking this turn in 2025. According to the research an advisory firm Gartner the top 10 global retailers will be turning to surge (aka dynamic) pricing to eliminate the rise and fall of demand some daily, some seasonal, some may even be monthly. Father time seem to be the only one who can tell us all.

    Although the new change seems frightening, some argue that we see price surging on a personal and public scale on a daily bases. Such as when Amazon-like retailers price match to keep up with competitors, or when shopping apps offer customers personal deals based of loyalties and memberships, when Kroger offers fuel discounts to customers who shop their local stores. These claims are to say that numerous customers will enter a business, but not all are paying the same price. While others argue no one will come in when the prices are inflated when they can just go to the Burger King or McDonalds right next door? Others claim they will wait out the heightened price hours to catch the deals at other times of day. 

    How this plays out is yet to be seen, but this maybe a small step to a plethora of dynamic pricing in the future.