Wendy's Chief Financial Officer Gunther Plosch addressed concerns regarding the fast-food chain's upcoming pricing adjustments. Plosch assured customers that Wendy's would maintain fairness while experimenting with dynamic pricing strategies.
Wendy's CFO Clarifies Pricing Strategy
In a recent statement to Quartz News, Wendy's Chief Financial Officer Gunther Plosch addressed the company's pricing strategy amidst concerns raised earlier this year. Plosch emphasized Wendy's commitment to fair pricing and customer satisfaction.
Notably, Plosch did not directly comment on the public relations issue the company faced in February regarding the speculation of surge pricing, likened to Uber's model. However, in a blog post, Wendy's had previously stated that it had not adopted dynamic pricing.
Regarding the current pricing approach, Plosch revealed that Wendy's has enlisted the expertise of an external pricing consultant. This move aims to ensure the company makes informed pricing decisions, particularly by introducing new digital menu boards.
Wendy's clarified that these menu boards aim to offer greater flexibility in showcasing featured items, not to implement surge pricing. The company reiterated its stance against raising prices during peak customer hours, emphasizing its dedication to providing value and transparency to its customers.
During a fourth-quarter earnings call in 2023, Wendy's CEO Kirk Tanner announced plans to introduce new features for testing as early as 2025, as reported by The U.S. Sun.
Tanner mentioned that these enhancements would include dynamic pricing, daypart offerings, as well as AI-enabled menu changes and suggestive selling. This move indicates Wendy's commitment to innovation and improving the customer experience in the coming years.
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Wendy's Invests in Tech for Pricing
The Business website reports that Wendy's is considering fluctuating prices based on real-time trends and demands. This shift could bring about price changes at different times, off-price modifications, and benefits and challenges for customers.
CEO Kirk Tanner disclosed during a February earnings call that the company has injected $100 million into its operations.
A significant portion, $30 million, has been allocated to the development and installation of digitdeveloping and installing hat digital advancements aimed at enhancing the efficiency and accuracy of service at Wendy's locations.
He highlighted the role of technology in empowering restaurant staff to focus on delivering fresh, high-quality meals and fostering positive customer interactions.
Wendy's Sales Affected by Inflation
Despite its efforts, Wendy's, like other fast-food giants, is grappling with the effects of inflation. The Ohio-based company revealed that its sales reflect the economic disparities among consumers.
Wendy's noted that customers earning less than $75,000 annually face financial strain, resulting in reduced visitation to its outlets. Conversely, higher-income individuals are frequenting Wendy's more often.
Although Wendy's reported a 2.6% increase in global systemwide sales growth in its first-quarter earnings report, it fell short of Wall Street's expectations. Factors contributing to this growth included improvements in same-restaurant sales, advertising, franchise royalties, and its share-buyback loyalty program.
However, the company's revenue of $534.8 million and earnings per share of 0.20 cents missed the forecasted figures of $541 million and 0.21 cents, respectively, by FactSet analysts.
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