Wendy's, a popular fast-food chain, is trying out a new way of setting prices for its food. This means the cost of items like burgers and Frostys could change depending on the time, where you are, and how many people want them. So, sometimes, a Frosty could be as expensive as a whole Baconator meal.
During a chat with those who have invested money in the company, the big news came from Wendy's boss, Kirk Tanner. He explained this test is all about finding new ways to price their menu items.
Wendy's Innovates with Digital Menu Rollout
Wendy's is planning more than just changing how they price their food. On the same call with investors, Tanner talked about new ideas to make more money for the company. One of these is using digital screens for their menus. These screens can change prices as needed and even show different items depending on the time of day.
In a message sent to USA TODAY, Wendy's shared that they're putting a lot of money into new technology. This will help them sell more online. "We're updating our loyalty program and adding other cool features," Wendy's said.
"For example, with these new digital menus we're putting in some of our U.S. stores, we can change our menu faster and give special deals and discounts to our customers."
Starting in 2025, Wendy's will try new ideas, like changing prices based on demand and suggesting different menu items using artificial intelligence. "We're going to add features that change the menu based on what time it is and use AI to recommend items to customers," the CEO explained.
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He believes that as these technologies prove their worth in Wendy's restaurants, the owners of franchise locations will want to use these digital menus. This should help Wendy's sell more and make more money.
Wendy's plans to spend about $20 million to put digital menus in all its U.S. restaurants by the end of 2025. On top of that, they're looking to pay another $10 million in the next two years to make these menus even better worldwide.
The company's new CEO, who just took over this month, comes from a long career at PepsiCo. He's taking over from Todd Penegor, the boss at Wendy's since 2016.
Caution Against Wendy's New Pricing Strategy
An economics expert has warned that Wendy's new plan to change its prices based on demand might not go well with customers.
Steven Suranovic, an associate professor at George Washington University, spoke to The Daily Mail about the risks. "Introducing something customers aren't ready for could backfire," he said. Suranovic explained that by adjusting prices, Wendy's would take more money from customers themselves, which could upset people who buy lunch during busy times the most.
"If customers feel like they're being overcharged, they won't be happy with these changes," he added.
Despite these concerns, Wendy's is set to spend $20 million on this initiative, introducing digital menus in their restaurants that can show changing prices instantly.
Moreover, The New York Post highlighted a report from PriceListo, a platform that tracks how much things cost for consumers, showing Wendy's already has the highest prices among fast-food chains in the United States. This came after their menu prices increased by 35% between 2022 and 2023 because of inflation.
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