American fast food chain Wendy’s plans to test dynamic pricing and AI menu features in 2025, Nation’s Restaurant News and Food & Wine report. This means that food prices will automatically change throughout the day based on demand, similar to “price gouging” in ride-sharing apps like Uber and Lyft. The initiative was revealed by Kirk Tanner, CEO and president of Wendy’s, during a recent discussion with analysts.
According to Tanner, Wendy’s plans to invest approximately $20 million to install digital menu boards capable of displaying these varying prices in real time at all of its U.S. locations. An additional $10 million is planned over two years to improve Wendy’s global system, which aims to improve order accuracy and sell other menu items.
In conversation with Food & Wine, a Wendy’s spokesperson confirmed the company’s commitment to this pricing strategy, describing it as part of a broader effort to grow its digital business. “As early as 2025, we will begin testing a variety of enhanced features on these digital menus like dynamic pricing, different offerings at certain parts of the day, AI-enabled menu changes, and suggestive selling based on factors like the weather,” they said. said. “Dynamic pricing can allow Wendy’s to be competitive and flexible in pricing, motivate customers to visit and offer them the food they love at a great value.” We will be testing a number of features that we believe will provide an improved customer and crew experience. “
Wendy’s isn’t the first company to explore dynamic pricing: it’s a common practice across several industries, including hospitality, retail, air travel, and the aforementioned ride-sharing apps. Its application in the fast food sector has not yet been tested and customer reaction is uncertain. However, a few other restaurants have tested the method and achieved favorable results. “For us, it was all about consumer response,” Faizan Khan, a Dog Haus franchise owner, told Food & Wine. “The problem was that if you raised prices, you would sell less product, and it turns out that really wasn’t the case.”
The price change plans are the latest in a series of moves designed to modernize Wendy’s business with technology and boost its profits. In 2023, Wendy’s began testing FreshAI, a system designed to take orders with a conversational AI bot, potentially replacing human workers in the process. In his discussion, Tanner also discussed “AI-enabled menu changes” and “suggestive selling” without elaborating, although the Wendy’s spokesperson noted that suggestive selling can automatically put the focus on certain items based on local weather conditions, such as trying to sell cold drinks in the market. a hot day.
If Wendy’s goes through with its plan, it’s unclear how dynamic pricing will affect food delivery apps like Uber Eats or Doordash, or even Wendy’s own mobile app. Presumably, third-party apps will need a way to connect to Wendy’s dynamic pricing system (Wendy’s API, anyone?).
Separately, Wendy’s is also testing “Saucy Nuggets” in a small number of restaurants near the chain’s headquarters in Ohio. Fortunately, they have nothing to do with AI.
