Their new CEO has been in the job three weeks and this was his first "big" idea? I don't eat much fast food, but Wendy's is my go to when I do. I'm just not going to eat there because it's a fucking rude, customer hostile move. Surge pricing, however annoying, makes sense. There's more demand for rides than supply of drivers. Making food cost more because more not because of the restaurant is low on supply, but just because "demand is high across this time zone right now" is just a low move. I just don't want to support their business. Simple as that.
I can't imagine a customer who doesn't read about this and goes in and sees their normal meal more expensive because it's lunch time, will be switching where they get lunch
If there is a line to order, then supply is not keeping up with demand. (That said I, like you, would be loathe to visit any place whose prices fluctuated wildly.)
I would probably willingly pay 25% more, and unwillingly pay 40% more, if it kept me from going to somewhere with worse quality in the categories I choose.
This feels like such an incredible example of snatching defeat from the jaws of victory. I bet Wendy's PR team have had a miserable day. And all because they went for greed not service.
It would be a clever idea to have a ceiling price no higher than the current price, but offer lower prices at certain times of day. This is well understood in hospitality and why we have early bird specials, happy hours, etc.
Wendy's seem to have decided that the current price is to be be a floor, not a ceiling.
Except the ceiling is arbitrary? What you just proposed is the same game department stores do where everything is 50% off and you're supposed to think everything is just such a great deal.
Up to a point, yes. It's all psychological games really. But consumers at least know the not-to-exceed price walking in the door, which is not true with surge pricing, where they only know the will-exceed price.
> Beginning as early as 2025, we will begin testing a variety of enhanced features on these digital menuboards like dynamic pricing, different offerings in certain parts of the day, AI-enabled menu changes and suggestive selling based on factors such as weather
Beginning as early as 2025, I will begin testing a variety of enhanced features during my moments of culinary weakness like Arby's, McDonald's, Taco Bell, and suggest pizza and restaurants based on factors such as time of day and present company.
It's the perfect time from a price point perspective. I can get a large pizza for the same price as a single large meal at a fast food restaurant. If Wendy's pumps the prices up further it'll be even more advantageous. Yeah, you need to order ahead to keep convenience but these days apps are basically a necessity with fast food places anyway.
I really want to know how they anticipate this will 'motivate customers to visit' or 'enhance customer and crew experience'. I know it's marketing nonsense, but really, how?
They're wanting to spend $20 million on installing plus another $10 million 'earmarked'. Not much in the grand scheme of things but someone somewhere has convinced people it'll be worth the cost.
If they could invent a fast food menu display that stays still and doesn't really break down so I can see what the menu actually is when I'm waiting to order that would be great. Oh, wait...
'motivate customers to visit' - Some people like cheap stuff. Some amount of people who are not willing to pay x for a meal at noon might be willing to pay 0.9x at 2 pm. Other people have money and tight and inflexible schedules. Some of them may be more willing to visit at noon and pay 1.1x than they would be to visit at noon, wait in a 10 minute line, and pay x.
'enhance customer and crew experience' - Neither customers nor crew like it when the restaurant is busy enough that the line gets long. By making it more expensive to eat at peak times and less expensive to eat at off peak times, they think they can smooth out the demand schedule. Of course whether that's a net positive to any given consumer depends on their relative preferences on meal time, wait time, and meal cost. But the potential is there at least. On the crew side, a smoother demand schedule means they can either schedule fewer people on longer shifts, or if they keep schedules the same reduce the amount of "crunch time" during each shift.
> I know it's marketing nonsense, but really, how?
I suppose that there is a segment of the fast-food-burger market that would choose Wendy's over a competitor if the price of food drops a slight bit during off-peak hours.
However, reversed, I have a hard time imagining that they will be able to squeeze what customer base they have even more by creating surge pricing increases during peak hours.
Maybe they'll only adopt the discount side to try to aid customer volume during off-peak hours? That seems reasonable.
There's a McDonalds near me, where if you go at 2pm on Saturdays, you are going to be waiting in the drive-thru queue for around half an hour.
I'd imagine if they put the prices up by $1 most people would not care. Of course they would lose some customers, but the overall profit for the surge period will be higher.
This optimization is commonly done in SaaS businesses - it's better to serve 10 customers at $100 a month, than 50 at $20 a month.
Readit News
I can't imagine a customer who doesn't read about this and goes in and sees their normal meal more expensive because it's lunch time, will be switching where they get lunch
I would probably willingly pay 25% more, and unwillingly pay 40% more, if it kept me from going to somewhere with worse quality in the categories I choose.
It would be a clever idea to have a ceiling price no higher than the current price, but offer lower prices at certain times of day. This is well understood in hospitality and why we have early bird specials, happy hours, etc.
Wendy's seem to have decided that the current price is to be be a floor, not a ceiling.
Cue acres of bad publicity.
Beginning as early as 2025, I will begin testing a variety of enhanced features during my moments of culinary weakness like Arby's, McDonald's, Taco Bell, and suggest pizza and restaurants based on factors such as time of day and present company.
You sure it's not an issue with your local location? I've had a wide variety of quality from their stores.
https://news.ycombinator.com/item?id=39514464
They're wanting to spend $20 million on installing plus another $10 million 'earmarked'. Not much in the grand scheme of things but someone somewhere has convinced people it'll be worth the cost.
If they could invent a fast food menu display that stays still and doesn't really break down so I can see what the menu actually is when I'm waiting to order that would be great. Oh, wait...
'enhance customer and crew experience' - Neither customers nor crew like it when the restaurant is busy enough that the line gets long. By making it more expensive to eat at peak times and less expensive to eat at off peak times, they think they can smooth out the demand schedule. Of course whether that's a net positive to any given consumer depends on their relative preferences on meal time, wait time, and meal cost. But the potential is there at least. On the crew side, a smoother demand schedule means they can either schedule fewer people on longer shifts, or if they keep schedules the same reduce the amount of "crunch time" during each shift.
Floor = regular prices
Ceiling = regular prices + some percent
I suppose that there is a segment of the fast-food-burger market that would choose Wendy's over a competitor if the price of food drops a slight bit during off-peak hours.
However, reversed, I have a hard time imagining that they will be able to squeeze what customer base they have even more by creating surge pricing increases during peak hours.
Maybe they'll only adopt the discount side to try to aid customer volume during off-peak hours? That seems reasonable.
I'd imagine if they put the prices up by $1 most people would not care. Of course they would lose some customers, but the overall profit for the surge period will be higher.
This optimization is commonly done in SaaS businesses - it's better to serve 10 customers at $100 a month, than 50 at $20 a month.