Fast food dynamic pricing?

[IndyIan]

I guess real restaurants have lunch menus and dinner menus, which usually have lunch burgers being cheaper than dinner for the same basic thing. Also if Wendys display realtime pricing on their apps they probably will be able to spread out the peaks in their demand. Also I think the industry has found they have a set of core customers who are inelastic demand and will pay quite a bit more than a casual customer.
I find now that there are few decent deals like two whoppers for $9-10 at BK, feeds both the boys after a game or race, and I can snack on an apple or two and wait until we get home.

 

[14.1 Grms]

What a wonderful way to make me not want to eat at a restaurant. "Will my #2 combo be $12 or $22 today? Who knows, let's sit in line for 15 minutes just to find out!"

Not sure how "dynamic pricing" would work with coupons and that sort of thing, since normally sales pricing is based on moving increased X number of items a discounted Y price to make a profit. If the price constantly fluctuates, "static" coupon background math goes out the window.

 

[zzyzzx]

What a wonderful way to make me not want to eat at a restaurant. "Will my #2 combo be $12 or $22 today? Who knows, let's sit in line for 15 minutes just to find out!"

And the longer the line gets, the higher the price will be by the time you get to the cash register (or kiosk). I can easily see people getting mad if the price gets higher while they are waiting in line, as it cost $12 when you first glanced at the menu, but something more right before you were about to order.

 

[Lubener]

For some time people have been paying dymanic pricing on airline tickets, parking, sporting events, etc. It never stopped anyone from buying. It just moved to fast food and people will still go there and charge it on their credit card and eat till they burst..

 

[Reggaemon]

So this is the new CEO Kirk Tanner's idea to raise profits. This is not going to have the effect he's hoping for.

 

[vavavroom]

So this is the new CEO Kirk Tanner's idea to raise profits. This is not going to have the effect he's hoping for.

Maybe. When demand goes down they will just raise prices again to make up for their losses. Less work to be done, less employees, fewer expenses, more profits!

 

[SC Maintenance]

When I saw this I thought it was stupid, but regular restaurants charge less for lunch than the same thing at dinner, and some at least used to do early bird specials. No one really thinks about paying more for a flight or hotel during a holiday, for example. So to a degree it makes some sense I suppose.

Now having said that, I went to McDonalds without the app a couple months ago for breakfast. First time in maybe 2 years. It was the worst overpriced slop in the history of slop. Now I suppose they could care less because obviously I am not a large customer, but I used to get a coffee once in a while. They will never get anther dime from me. Ever.

I did stop at a Wendy's this week for a salad - or shall I call it some lettuce with one of their grilled chicken burgers on top. It was edible. The lettuce was fresh. The lady at the counter was really nice. I was in small town TN so quite likely that had something to do with it.

 

[Nukeman7]

Well, that didn't take long for public outcry to force Wendy's CEO to walk back their position on the "Dynamic Pricing" strategy:

Wendy's Will NOT Implement Surge Pricing

 

[Zee09]

I am surprised by how few of the fast foodies use apps. I hardly ever see many go that route at Wendy's
That ends a bunch of the nonsense price wise. Although the deals are good McDonald's still wins.

All Wendy's has to do is lower the cost of their drinks and that would bring people back but Wendy's just can't handle volume orders so more super long drive thru congestion.

They need to restructure their whole system.

 

[zzyzzx]

Maybe I could just rent the food?

You are already basically renting food and drink.

 

[k1xv]

Buying a burger is going to be like buying and selling stocks in the stock market.

Maybe, if I decide today that I want a Baconator and fries, I can buy a futures option that determines tomorrow's price. And tomorrow's price goes above my option price, I can sell my option to someone else for a profit.

 

[Zee09]

Buying a burger is going to be like buying and selling stocks in the stock market.

Maybe, if I decide today that I want a Baconator and fries, I can buy a futures option that determines tomorrow's price. And tomorrow's price goes above my option price, I can sell my option to someone else for a profit.

But you can't buy and do a quick flip

 

[Jdeere562]

I don't care for the idea at all. But I know other's do the same thing. Airlines and hotels come to mind. Let the CWS come to town, rooms double in price. Flights are cheaper some days than others. I would think a burger would be the same price all day, but I guess not anymore.

 

[14.1 Grms]

When I saw this I thought it was stupid, but regular restaurants charge less for lunch than the same thing at dinner, and some at least used to do early bird specials. No one really thinks about paying more for a flight or hotel during a holiday, for example. So to a degree it makes some sense I suppose.

Restaurants that do different lunch and dinner pricing typically have different portion sizes and sometimes additional sides for dinner, hence the different pricing.

I don't care for the idea at all. But I know other's do the same thing. Airlines and hotels come to mind. Let the CWS come to town, rooms double in price. Flights are cheaper some days than others. I would think a burger would be the same price all day, but I guess not anymore.

Flight tickets and hotel rooms are normally booked enough in advance that if you don't like the price due to carrier, date, etc, you can look for alternatives. With this "dynamic pricing", you'd have no idea how much you're going to pay for food until you're already at the restaurant and in line, and while you do (may) have other options, you've already wasted time finding out your normal $8 burger is now $17 because Karen and her 19 kids in front of you just blew the pricing algorithm up.

 

[mk378]

Well, that didn't take long for public outcry

The announced start date was a year away. This was never anything more than a trial balloon to see what the public reaction would be.

Almost every other chain already has electronic menu boards and could implement dynamic pricing right now if they wanted to.

 

[PandaBear]

I guess real restaurants have lunch menus and dinner menus, which usually have lunch burgers being cheaper than dinner for the same basic thing. Also if Wendys display realtime pricing on their apps they probably will be able to spread out the peaks in their demand. Also I think the industry has found they have a set of core customers who are inelastic demand and will pay quite a bit more than a casual customer.
I find now that there are few decent deals like two whoppers for $9-10 at BK, feeds both the boys after a game or race, and I can snack on an apple or two and wait until we get home.

Lunch special
Tuesday special
Happy hour
Menu of the day
App only coupon
Limited time offer

Heck, in Asia if you want to order seafood, they are usually based off the price of the day because of seasons and weather.

They are all dynamic pricing.

 

[vavavroom]

I have developed a dynamic tolerance to bovine and porcine excrement.

 

[y_p_w]

They're backtracking now.

Wendy's says it has no plans to raise prices during the busiest times at its restaurants

Wendy’s clarified its stance on how it will approach pricing after various media reports.

apnews.com

“Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. We didn’t use that phrase, nor do we plan to implement that practice,” the company said in an email to The Associated Press on Wednesday.​

​

Wendy’s Co. plans to invest about $20 million to launch digital menu boards at all of its U.S. company-run restaurants by the end of 2025. It also plans to invest approximately $10 million over the next two years to support digital menu enhancements globally.​

​

Wendy’s said that its digital menu boards “could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.”​

Burger King is also mocking Wendy's with a free Whopper with at least a $3 mobile purchase in their app.

Burger King Is Giving Out Free Whoppers for 3 Days as Shade to Wendy’s ‘Dynamic Pricing’

Wendy's clarified that their new digital menu boards will "offer discounts" during "slower times of the day" rather than raise prices during peak hours. Regardless, Burger King is giving out free Whoppers in response.

people.com

 

[JohnnyG]

Maybe it was fake news to begin with?

 

[14.1 Grms]

Maybe it was fake news to begin with?

Nah, look at the phrasing in the AP response: "We didn't use the words surge pricing, and we're not going to implement it!"

Well, no, you didn't, but you said you were going to use that concept as a basis for a slightly different demand-driven pricing. Really easy way to test the market and then backtrack when the response is very unfavorable. "We didn't say that and it was taken out of context!" Then, later, they'll implement "dynamic pricing" and justify it by saying, "Well, we're doing dynamic pricing, not surge pricing, and surge pricing is what we said we weren't going to do and since dynamic pricing is new and different and special it doesn't count as the same thing!"

Vomit-level marketing semantics.