Wendy's will spend $20 million on digital menus to introduce customers to "dynamic pricing"

[yRaz]

please feel free to share more recipes

Put food on stove
Let it get hot
Take it off

 

[lonetac]

They dont list WHY they want to do this. They will still have the same 4 folks in the back working and you will still wait 10 minutes so there is no reason to do this other than driving profits for the CEO's bonus. The employees will not make more, they will not get bonus's or improved benefits so this is a GIANT NO.

I will never eat at wendys again when this goes live. its a simple way of screwing customers without serving any purpose other than providing more profit to the CEO and benefits the employees zero, squat.

If it helped the employees get paid a livable wage, id be all for it as these places already take advantage of cheap labor and try to invest as little as possible in their employees.

Fast food is already more expensive than an actual real hamburger from a restaurant so as this price goes up, expect folks to abandon you even more. Fast food was appealing because it was fast and cheap, its no longer either so it has no real benefit other than heart disease.

 

[m3tavision]

This is anti-consumer and against the law. No business is allowed to discriminate against customers. The price is the same for everyone, not just people pulling up in Cadillacs.

They are called a Franchise for a reason.

 

[GoldenGoat]

So basically, in the future, Wendy's wants eating at 6 PM is going to be a status symbol.

 

[NoLifeDGenerate]

It's hilarious everyone is losing their **** over this but hotels have done the same thing for years. It's the same service, same bed, same goddamn room no matter what day of the week it is.

 

[LemmingO]

It's hilarious everyone is losing their **** over this but hotels have done the same thing for years. It's the same service, same bed, same goddamn room no matter what day of the week it is.

Dynamic pricing in hotels is nothing new, you're right, but it is predictive, not just real-time. Same thing applies to airplane tickets.

The main difference I see here is that on a hotel booking system you lock in the best price for you, if you book in advance. In this case, there is a difference between the moment you step in the door of a Wendy's and the moment you pay. They're measuring seconds, not hours or days. Also, considering corporate greed, imagine that part of the criteria will be the time it takes from ordering to get the order. If it's long (in fast food terms), it's implied the product is "complex" and the price may rise, when in practice there are a number of elements - from worker experience to the number of employees currently on that shift (fewer employees, longer wait times)

 

[erickmendes]

Anyway... Burger king and McDonalds tastes awful, at least down here in Brasil. The meat tastes like cardbox and the chicken nuggets tastes like recycled paper.

 

[madboyv1]

Wendy's is backpedaling pretty hard and fast:

https://www.reuters.com/business/retail-consumer/wendys-will-not-implement-surge-pricing-ceo-comment-causes-online-stir-2024-02-28/

also reported by NYPost, Yahoo Finance, Today, some random fox station, etc.

@Cal Jeffrey not sure if you wanted to amend an update.

 

[lonetac]

It's hilarious everyone is losing their **** over this but hotels have done the same thing for years. It's the same service, same bed, same goddamn room no matter what day of the week it is.

Less about people losing their **** and more them expressing their dislike of a system using their wallets.

Hey you can implement whatever stupid system you want, doesnt mean folks are going to go eat there if they dont like it.

I stopped eating at shake shack because they have you order at a kiosk, pick up your order, clean your table and clean up your mess too while never speaking to employee. They still ask for a tip. I stopped eating there, terrible experience.

 

[GreenNova343]

The difference vs. Uber is the Uber process already involved looking at your phone ahead of time for the price and wait. This step was already factored into a process that consumers generally find convenient enough for the value received.

Wendy's is in a completely different situation. Consumers expect they know the price without having to check their phone first, and many will not want to add this new step to a fast food restaurant experience whose primary selling point is convenience. Those who travel to the store first, and only then find out the pricing has "surged" unexpectedly, are rightly going to be angry. We're talking the kind of anger that people carry a grudge over, not the kind you forget a minute later. My expectation is many of those customers will not return to Wendy's again. And if Wendy's had any advertising or signage with a lower price, Wendy's can also expect actionable consumer complaints over deceptive pricing.

A related but different complaint would apply if it is per-item "surge" pricing as opposed to just a general adjustment that applies the same to all items on the menu. If a customer puts an order together in their head, and then finds that out that specific order got hammered on price before they even had a chance to place it, they will likely be upset. Now imagine that happens with a family of six. That's another family that will never associate "Wendy's" with "convenience" again.

I'm a tech enthusiast but this is an area where the old low-tech way is superior to this new high-tech way. Make your normal pricing the "surge" pricing, and then advertise discounts for non-surge periods like "Happy Hours" and "Senior Blue Light specials" or whatever you want to call the less crowded hours. Everyone is already comfortable with that model, it is simple to communicate, and requires no additional investments in technology.

Not only that, but surge pricing makes sense for Uber because it's actually basic supply-and-demand: demand for rides (the actual product) goes up, so if the supply of available rides doesn't also increase then the price per ride should go up to reflect that demand. And I would imagine that the drivers get paid more, so the costs of the products is also going up.

With fast food restaurants, however, while the food is the product, and the demand for it might vary at different times of the day, it has little bearing on the supply of the food. Sure, you might occasionally have a run on Spicy Nuggets or Baconators, but in general the restaurant is getting a certain amount of food delivered -- either daily or more likely on a weekly basis -- so they'll have the same starting supply at the beginning of "surge" time whether they sell 10 of an item or 50. Supply didn't change, & demand can be fickle (I.e. sometimes people want nuggets, sometimes they want the sandwich). Not sure they can even accurately forecast how many people they'll have on any given day, as some days may be more popular than others for certain lunchtime crowds. And unlike Uber, they're not going to be able to respond as dynamically to surges.

I suspect that there's a reason they've announced it -- probably some government regulation requiring them to warn customers about the policy -- which means they'll probably have to post something either in the store or on the menus letting you know that you're there during "surge" time. And the problem is then going to be that a significant portion of their customers will then walk back to their cars...so whatever extra revenue boost they might get from the increased surge prices will end up being counterbalanced by the loss in actual customers. If X is the regular price of the item & Y is the surge price for it (let's say 5%, so Y = 1.05X, & you usually get 20 customers to buy it during the planned surge time, you would expect your surge revenue to be higher (20Y = 21X > 20X). But...you had 4 customers decide to leave without ordering because of the surge, so you actually lost money (16Y = 16.8X < 20X). I suppose they could try fiddling every week or so with changing the surge times, but again if you see a sign saying "Surge time!" when you walk in, you're going to think, "How much do I really want Wendy's today?"

 

[Reachable]

Ostensibly the surge pricing in transportation scenarios is to even out demand over time so that the system doesn't become overstressed at peak hours. You can perhaps schedule your airplane flight for a different time to save some money (although I don't see how you'd have the same kind of leeway with local cab rides such as what Uber and Lyft provide).

This Wendy's scheme sounds like blunt profiteering and nothing else, and that they're trying take advantage of customers acquaintance with the surge pricing idea and are hoping that said customers won't bother to analyze it.

 

[hwertz]

A) Agreed with the comments that fast food has become overpriced. Even McDonalds, there's sit-down restaurants here I could order from for the same or less; or make something myself and save some money. $9-12 for a meal? I mean inflation is inflation but it does make one think twice about it.

B) My objection is I'm sure this will only have price INCREASES; I'm sure they won't have a "happy hour" where they find the times the place is LEAST busy and bump a couple cents off the prices.

C) I'm torn over all. I see this as a way to hike up prices and I don't like it. On the other hand, the Wendy's here (and McDonalds, and probably the others), when it's busy, has a line out to the street and is essentially having to turn away customers. The high prices that trouble me are apparently not troubling these people. Supply and demand, essentially the demand is (in that short term) exceeding their ability to supply, so in economic terms it does make sense to bump up the prices at that point until the line quits going out onto the street.

D) This sure is going to cause a problem for things like "Uber Eats". Not my problem, or Wendy's, but it could be a rude surprise to order (I assume someone wouldn't pay the delivery fee for one burger and fries...) what you thought would be $40 in burgers and fries only to find out it's actually going to cost $50.

Editt: OK, I see they've already decided not to do surge pricing. If anything they may offer discounts at slow times of days. Carry on then.

 

[hahahanoobs]

Despite the horse-and-buggy crowd crying foul, this actually sounds like a great idea. For one thing, the prices aren't going to fluctuate dramatically -- not nearly as badly as Uber. (In leaving a large event, I've seen a ride go from $15 to $90 in a few minutes time).

Furthermore, the article ignores the very real benefits this will have for consumers. Yes, for consumers. If you're a price-conscious individual for whom a $1 difference matters -- you'll try to lunch a little earlier or later. And if that price delta doesn't bother you, why you'll get your burger even faster, as the peak crowds will now spread out more over time.

From the perspective of economic efficiency, it makes little sense that these facilities sit near-idle for most of the day, while 90% of their business is crammed into 2 or 3 brief peaks. Anything that improves overall efficiency, eventually helps us all.

It's never about the customer. If too many go at the more discounted time, the establishment will adjust pricing accordingly to offset those losses.

Let me remind you a Big Mac combo is what, $12 now? Remember how cheap streaming packages were in the early days?

I can't say dynamic will fail, but if we're talking about it before it officially happens, I'm gonna go with my gut based on the history of how businesses tradionally work.

Wendy's would rather you to take the $90 dollar ride over the $15 one...

 

[hwertz]

Furthermore, the article ignores the very real benefits this will have for consumers. Yes, for consumers. If you're a price-conscious individual for whom a $1 difference matters -- you'll try to lunch a little earlier or later. And if that price delta doesn't bother you, why you'll get your burger even faster, as the peak crowds will now spread out more over time.

It's never about the customer. If too many go at the more discounted time, the establishment will adjust pricing accordingly to offset those losses.

Let me remind you a Big Mac combo is what, $12 now? Remember how cheap streaming packages were in the early days?

I can't say dynamic will fail, but if we're talking about it before it officially happens, I'm gonna go with my gut based on the history of how businesses tradionally work.

Wendy's would rather you to take the $90 dollar ride over the $15 one...

Agreed. (First off, I'm not a consumer, I'm a customer.) I don't see this benefiting the customer, the customer is not going earlier or later to "save" a dollar -- they are having to go earlier or later to avoid paying an EXTRA dollar. If they had a happy hour where prices were reduced, then sure. But the plan, as described, was not planning to do this.

That said, in my area both the McDonalds and Wendy's actually get drivethrough lines backed out to the street at peak times, so honestly this would have been a perfectly sensible plan for them to implement. I don't have to like it to recognize that it would have been sensible.

That said, it sounds like they've already rapidly backpedalled on this, now implying this will in fact be used to offer discounts at slow times instead.

 

[Neatfeatguy]

I'm staggered that Wendy's doesn't have digital menus. In Australia, all the major chains (McD's, KFC etc etc) have digital menus. I haven't seen major chain fast food with a non-LCD screen menu for years.

Surge pricing is an interesting concept that won't work. Consumers will vote with their feet.

Last place I worked at they used to be the only allowed POS (Point of Sale) provider for Wendy's. I think Aloha moved in and took over for the POS aspect of things......anyway

The company I worked at was also working on implementing digital menu boards and they had a few big fish on the line (aside from Wendy's at the time), they were on the cusp of getting Tim Horton's digital menu business, but I'm not sure if they every hooked them because I left the company by then. Before I left some of the Wendy's franchises started implementing digital menu boards and they were such a pain in the *** to troubleshoot and service remotely. Most employees as the stores had zero knowledge about computers or where they were even housed for the menu boards that it was like pulling teeth to get them to help. We'd have to resort to hiring third party techs to be our hands and eyes at the stores......

$20mil isn't a lot of money for pushing out digital menu boards to all locations. You need to factor in the drive thru and not just the inside lobby if they want this so called "surge pricing" to be possible at all locations. These menu boards outside need climate control otherwise the monitors will overheat or freeze - it's a costly effort to set up all these locations to have full digital menus.

(speaking from my last job) To fully outfit a new Wendy's location with drive thru and inside menu boards - it would vary from usually around 5 to 12 TVs. Most TVs had their own NUC attached to them (sometimes you could run two TVs from one NUC, depending on the hardware and software options you were willing to purchase) and any TV outside needed to be housed in casing with climate control options. In the end, you're looking at $5k to $15k per install location. Either a lot of Wendy store locations already have digital menu boards and $20mil is enough to cover the cost for the remaining stores or whomever is in charge of rolling this project out is grossly out of their league and they have no idea for the cost of product and installation costs.

As for Wendy's wanting to experiment with "surge pricing", I already don't eat their anymore because of the outrageous prices. At my local Wendy's a Baconator is $8 + a large fry is $4. I'm not spending $13 (after tax) for a burger and fry. No thanks. If you factor in that a lot of the meals are easily $11+ and you have a family of 4 you're easily dropping around $60 just for 4 meals at a fast food place that has okay food.

No thanks, Wendy's. I'd much rather spend $70 and go to a sit down place that offers really good burgers and fries and then drop an extra $10-15 for a tip. Fast food used to be easily half the price of a good burger sit down spot, now that gap is getting smaller and smaller and it's just not worth it to eat fast food anymore.

 

[ferrellsl]

Fast food is in serious trouble, they are pricing themselves out of the market. Surge pricing only pisses people off, and they will stop going. If I have to do fast food, its chick fil A, or culvers. Most of the time I'd prefer an actual restaurant, for an extra $3 I'll get actual food.

Not to mention, Wendys management is garbage and has been for years. They cant keep employees or train the ones they have. And now, they are turning "high demand" caused by a tiny workforce into a way to make more money.

Yeah, this is a disincentive to provide quick service. Imagine all the Wendy's managers out there slowing down their production lines on purpose in order to inflate the revenue they take in during peak hours. Wait times can already be ridiculous, but this would ensure longer lines and higher prices.

 

[hwertz]

(speaking from my last job) To fully outfit a new Wendy's location with drive thru and inside menu boards - it would vary from usually around 5 to 12 TVs. Most TVs had their own NUC attached to them (sometimes you could run two TVs from one NUC, depending on the hardware and software options you were willing to purchase) and any TV outside needed to be housed in casing with climate control options. In the end, you're looking at $5k to $15k per install location. Either a lot of Wendy store locations already have digital menu boards and $20mil is enough to cover the cost for the remaining stores or whomever is in charge of rolling this project out is grossly out of their league and they have no idea for the cost of product and installation costs.

I'm surprised they didn't get some kind of bespoke hardware (even if it was USB-driven or something) to run a bunch of heads off a single NUC. Although the NUCs are pretty cheap so I guess.

 

[Neatfeatguy]

Yeah, this is a disincentive to provide quick service. Imagine all the Wendy's managers out there slowing down their production lines on purpose in order to inflate the revenue they take in during peak hours. Wait times can already be ridiculous, but this would ensure longer lines and higher prices.

Wait times are hammered from the DMs and owners - the store managers better be on top of keeping the wait times in the allotted range or they're going to find themselves kicked to the curb. People are there for the "fast" aspect of the business. If the store cannot keep the wait times in check they tend to lose business because a lot of people are not willing to wait.

Wait times are a very, very important for these companies so they work on maximizing their profits. Everything about the fast food business is about time and getting as much as you can done in the shortest amount of time with the fewest number of employees as possible to keep the business going without hitches and keep the overhead as low as possible.

Cooking the time and slowing things down will only piss off customers and overall, lose business. Jacking the prices up on something 10% won't make a lick of difference if you lose out on 25% of your customer base because you pissed them off.

 

[Neatfeatguy]

I'm surprised they didn't get some kind of bespoke hardware (even if it was USB-driven or something) to run a bunch of heads off a single NUC. Although the NUCs are pretty cheap so I guess.

It could very well be different now, I left that company almost 10 years ago now. At the time they were just starting to get their software to allow multiple monitors to run off one NUC and display different images to both TVs. Before that each TV required it's own NUC.

 

[hwertz]

Wait times are hammered from the DMs and owners - the store managers better be on top of keeping the wait times in the allotted range or they're going to find themselves kicked to the curb. People are there for the "fast" aspect of the business. If the store cannot keep the wait times in check they tend to lose business because a lot of people are not willing to wait.

That's one thing I can't complain about about the Wendy's here. I haven't been there in quite a while (I don't care to spend $10-15 for a burger and fries... and when I would get those late night cravings, well, they are closed by then now.) BUT they actually apologized for the wait once after I probably waited 90 seconds (not waiting at the window, I was in a line where they served 5-6 cars in like 60-90 seconds flat.) It's probably the fastest drivethrough I've ever been too, kudos to their manager or procedures or kitchen layout or whatever, they are considerably faster than the McDonalds are in the area.

 

[Endymio]

Let me remind you a Big Mac combo is what, $12 now?

Yet McDonalds' profit margins are no higher than they were in the 1980s. You want to blame McDonald's for Bidenflation?

Remember how cheap streaming packages were in the early days?

Sure. Most companies are willing to offer a new product at a loss, to generate market share. Do you believe they can defy the laws of economics and do that forever?

Imagine all the Wendy's managers out there slowing down their production lines on purpose in order to inflate the revenue they take in

You realize that customer-facing managers aren't scored on revenue, but rather metrics dealing with customers served, right?

 

[ZedRM]

I wonder who will buy the wendys bldg near me when it goes out of business? I hope its a place with some common sense.

That rules out most of the big players.

 

[hahahanoobs]

Yet McDonalds' profit margins are no higher than they were in the 1980s. You want to blame McDonald's for Bidenflation?


Sure. Most companies are willing to offer a new product at a loss, to generate market share. Do you believe they can defy the laws of economics and do that forever?


You realize that customer-facing managers aren't scored on revenue, but rather metrics dealing with customers served, right?

lol This is political now? Shocker. Newsflash: It's not.
It's not the customer facing mangers coming up with these store-wide changes, sorry. It's not happening by the way if you read the update on this story, so I guess dynamic pricing wasn't a good thing for consumers like you claimed. Dude even had some weak damage control like someone else I know.....

 

[Endymio]

sorry. It's not happening by the way if you read the update on this story, so I guess dynamic pricing wasn't a good thing for consumers like you claimed.

Oops! Actually, yes it IS still happening -- and happening exactly as I claimed it would. Rather than drastically raise prices during peak hours, Wendys clarified to state they would instead only lower prices during off-peak hours.

 

[hahahanoobs]

Oops! Actually, yes it IS still happening -- and happening exactly as I claimed it would. Rather than drastically raise prices during peak hours, Wendys clarified to state they would instead only lower prices during off-peak hours.

A set time is not dynamic is it?