Wendy's announced it's considering adopting Surge Pricing for their fast food business. How would that work? On a Facebook ad, hundreds of people were saying bye already to Wendy's, so it's not off to a great start. Is there hope for them?
How does Surge Pricing benefit a business?
- Thread starter Katrina
- Start date
It's all about supply and demand. If a business has overwhelming demand at a certain time or for a certain item, economics says it should increase the price of the item until it gets all the way up until it gets too expensive.
Airlines calculate surge pricing for every day.
Airlines calculate surge pricing for every day.
How would that work for Wendys when there are other fast food joints right next door and across the street that don't fiddle with their prices?
Consumers are not rational. I don't really see most consumers going: hey I want to buy a bacon double cheeseburger and if I drive 2 more minutes I can save 50 cents.
Pretty sure Wendy's is banking on consumers favoring convenience and already being in line.
My personal view is that this is terrible for consumers (but probably great for the company)
Pretty sure Wendy's is banking on consumers favoring convenience and already being in line.
My personal view is that this is terrible for consumers (but probably great for the company)
Agreed, it's great for the bottom line, but not so great for customers, particularly at a time when fast food as a whole is an incredible expense. What used to be viewed as cheap, quick meals is now as much as going out for a nice dinner, the people who relied on fast food for a cheap way to feed their family are struggling more than ever to find deals, and if the prices start changing on a whim it could be the difference between a $25 bill or a $35 bill for a group. That could mean someone doesn't eat tomorrow, it could mean someone doesn't eat that night. Companies don't consider those factors, and reasonably so, I suppose, but they're going to be pricing out most of their market the way things are going.
I'm not a huge fan of the idea because everything is already rising in price, food included. I'm interested to see how it plays out on apps like Doordash or Uber Eats, who offer Wendy's as a delivery option. Do the surge prices pop up on there too, or is it just going to stay the flat rate the entire time? If it's the flat rate, I could see more delivery being done during that surge pricing period. Why wait in line when you can basically pay someone else to do it for you and end up paying the same amount if you went and picked it up yourself?
At the end of the day though, it probably won't affect me too much. I imagine it's only going to go into effect during peak hours, when they're at their busiest (so probably the lunch and dinner hours), and I typically only go to Wendy's late at night after work when it's not super busy (most I've ever seen at the one I typically go to is like 3 cars plus mine and it's not very often that it happens), but I can see how it'll be frustrating to others.
At the end of the day though, it probably won't affect me too much. I imagine it's only going to go into effect during peak hours, when they're at their busiest (so probably the lunch and dinner hours), and I typically only go to Wendy's late at night after work when it's not super busy (most I've ever seen at the one I typically go to is like 3 cars plus mine and it's not very often that it happens), but I can see how it'll be frustrating to others.
I think this is really good business. Few folks are going to be like “Dang, I’m going to go to McDonald’s instead.” You pay the increased price without even thinking about it. If you do think about it, you’re probably blaming our president about how expensive things are now.
As a customer, it’s lame though.
As a customer, it’s lame though.
The newest news now is that Wendy's CEO is backtracking and attempting to clarify what he meant by dynamic pricing. He is now saying that in off peak times they're thinking of reducing pricing to get customers in the door. I really think that's the better way to go about this in order to get people in, because there are many restaurants someone can go to instead of seeing that their $5 burger is now $6 or $7 only because you got there an hour later. I'd walk out just to prove a point.
Lowering prices, yes! So long as they don't jack them up first!
I don't believe him at all. There will be a price increase right before they launch this. The off peak times will feature the regular price we're accustomed to paying. Nothing will be cheaper. 😛
We don't claim lowest prices of the year, but I see it regularly at work. New sale tags go up at the beginning of a new month, and the base price of the item will go up, but the sale price will be what it used to be before the increase. It's absolutely wild to me. Is it really a savings if the sale price is what the base price of the item used to be? I guess it works though because people still buy the item anyways.
Yep, most people don't pay attention, so they don't realize that they're just paying the exact same price for the 'sale' item. It's insane how well it works!
They're one of the ones I was referring to, lol, they have a near constant sale and they do offer actual incentives, like Kohl's Cash, but if you track the prices they're almost always constant lol.
But when they have clearance sales...you really can get a valuable deal!
That is absolutely true, and when I would be in there raiding the shelves, lol. Still would be if I could afford to 😀
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