Could ‘Dynamic Pricing’ Actually Make Fast Food Better?

Have you ever been eating a cheeseburger and fries, procured from a drive-thru, and wondered “Wow, I wish I could pay even more for this incredibly mediocre lunch?” If so, you’re in luck! Fast food chain Wendy’s has announced plans to test “dynamic pricing” at its locations across the country, beginning in 2025.

According to CNN, the move is a part of the chain’s $20 million investment in digital menu boards, which will allow it to tweak the price of a Biggie Bag or Frosty in real time. Wendy’s also has plans to use “AI-enabled menu changes” and “suggestive selling,” according to Wendy’s CEO Kirk Tanner. The company has not yet announced further details on exactly how dynamic pricing will impact consumers, though it hopes that the new menu boards will “drive immediate benefits to order accuracy, improve crew experience and sales growth from upselling and consistent merchandising execution,” Tanner said on an earnings call.

Dynamic pricing, or “surge pricing,” is, of course, not new. It’s long been used by Uber and Ticketmaster and other companies to manage demand in situations when a whole lot of people all want the same thing, whether that’s a ride home from the bar on Friday night or front-row Beyoncé tickets. But even though we’ve all had a few years to adjust to the reality of facing different prices depending on the time of day, the weather, and all manner of other unpredictable factors, that doesn’t make it suck any less. There’s a particular indignity in being forced to pay more for something that was substantially cheaper just hours ago, simply because the company’s algorithm has determined that there’s high demand.

Not surprisingly, Wendy’s insists that the changes will actually benefit consumers. “Wendy’s has always been about providing high quality food at a great value to our customers and this recent investment will continue that,” a Wendy’s spokesperson told Eater in a statement. And Wendy’s is saying that this pricing scheme won’t result in customers paying more at the drive-thru window. “We would not raise prices when our customers are visiting us most,” a Wendy’s spokesperson said. “Digital menuboards 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.”

The changes come at an interesting time for the fast food industry, especially when it comes to cost. Consumers have been talking for months about the rising price of fast food, and it’s clear that the industry only has plans to get even pricier. Thanks to inflation and outright price hikes, Wendy’s became the country’s most expensive fast food chain in 2023, bumping Burger King out of the No. 1 spot. McDonald’s has also steadily increased prices over the past few years — 10 percent in 2023 alone — so much so that the chain had to admit that the higher prices were driving away customers.

It’s long been clear that, for many major corporations, cranking out every cent of possible profit is far more important than customer satisfaction, as evidenced by the scourge of “shrinkflation” and what feels like a widespread decline in food quality across the board. While in theory Wendy’s could use its new menuboard technology to discount fries when the drive-thru is deserted, dynamic pricing also offers chains the ability to implement the price hikes we’ve seen everywhere else at an individualized level. And it’s not because they need to make a little more money on their french fries to stay open. What they’re actually doing is testing you — us, consumers — to see exactly how much you’ll pay for a burger and fries when you’re in a hurry and Wendy’s is the only good option around for lunch.

It’s too early to tell whether or not other chains will follow Wendy’s lead, but that future isn’t hard to imagine. It’s almost as if these CEOs have plans to make everywhere feel a little bit like an airport, a place where you’re willing to pay exorbitant sums for a sandwich or bottle of water simply because you’re hungry and trapped and have no other option. Except in this case, the airport is Earth.

Update: February 28, 2024, 9:30 a.m.: This article was updated to include additional comments from Wendy’s.