What is surge pricing in the fast food industry? Wendy’s restaurants to implement the technology

Wendy’s is gearing up to be a stronger player in the fast-food industry by expanding its investments in technology. Last year, the company launched its generative AI platform which they call Wendy’s Fresh AI.

This system automates the chain’s drive-thru experience, which the company says benefits customers because of the resulting speed and accuracy of service.

Digital menus, dynamic pricing, daypart offerings

The Ohio-based fast food chain plans to go even further next year by investing millions in digital menu boards that aim to improve order accuracy and increase upselling. They intend to roll out the boards as early as next year.

The company will also test advanced features of the menu boards such as dynamic pricing and daypart offerings.

Common dayparts in the restaurant business are breakfast, lunch, dinner, snack, and late night. Restaurants often divide the day into multiple dayparts to tailor their operations and menu offerings to meet the needs and preferences of customers at different times of the day. Wendy’s has already invested heavily in their four-year-old breakfast menu.

What is surge pricing in the fast food industry?

Surge pricing is the practice of adjusting menu prices in real-time based on various factors such as demand, time of day, day of the week, and other market conditions.

Demand-based pricing uses data analytics and technology to analyze demand patterns and adjust prices accordingly. Prices are likely to be higher during peak meal times when demand is high, and lower during slower periods to attract customers.

This pricing strategy allows restaurants to maximize their earnings by charging different prices for the same menu items at different times. Dynamic pricing is already being used by restaurants, although at a more basic level. The concept of early-bird specials and happy hour, for example, adjusts the prices down during what are commonly low-traffic hours.

With the use of advanced technology, Wendy’s hopes to make more accurate adjustments in price that will help increase their revenue and attract customers.