[Puffer Fish]

I saw a news story that seemed interesting to me due to the reactions it provoked in other people.

The fast food restaurant chain Wendy's announced they were going to implement a policy called "dynamic pricing", where the prices go up or down depending on the time, going up during peak times when they are busy and have long lines.

This seemed to generate a huge amount of push-back and anger from people, who see it as a form of price-gouging.

But is all the anger about this policy really logical, or is it just based on emotion?


Here are some of the responses people had to this story on TikTok:

"I am sick to death of the corporate model of squeeze, squeeze, squeeze..."

"Wendys lost my business. I want a set price all the time... budget"

"What this tells me is that if they can offer discounts at certain times of the day, they could just as easily lower their overall prices."

"They want to spin it like a benefit when their prices are already high for what they offer."

"Surge pricing doesn't mean discount... it means greed. They probably just keep the regular prices and jack them during busy times. They'll just raise the 'normal' prices so that it is at its peak during rush hour."

"Like corporate greed has fueled most inflation the last few years."

"They're just doing damage control at this point. If they implement this I guarantee we see more increases than discount"

"Dynamic pricing and surge pricing is the same thing!"

"You really think Wendy's lowers the prices to below their normal price during slow times? They kist want to charge more when it's busy"

"Because corporations using price gouging is very much a political issue, as they are allowed to do this by politicians"

"At peak times there is more overhead in the form of personnel, this will let them keep their serves times low."

"It's about driving customers in when business is slower. They aren't trying to pull people in at noon."

"They charge $6 for a Dave's single. I am so over Wendy's. Just way too pricy for fast food."

"I've stopped eating out because of price gouging and tipping. They think they have us wrapped around their fingers, but we will just adapt our lifestyles."

"If fast food like Wendy's has become too expensive for you, time to eat out less. In the old days families rarely ate out. I think a lot of people are entitled. There are plenty of different fast food options, if you think another offers better quality and value"

"I'm still boycotting Wendys... don't care how they call it, it's penalizing customers!"

"Still boycotting Wendy's from here on out. The audacity of taking advantage of people during this economic downturn for a higher profit for its corporate higher ups is disgusting."


Here are the news articles:

After facing backlash, Wendy's is pushing back against widespread reports that the fast food chain plans to add "surge pricing" to its digital menu boards starting next year.
On an earnings call earlier this month, Wendy's CEO Kirk Tanner said the company is investing $20 million to install new digital menu boards at all Wendy’s locations in the U.S. by the end of 2025, with another $10 million over the next two years to add new digital menu boards at Wendy’s across the globe.
He said one of the features of the new digital menu boards is "dynamic pricing."
"Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and day-part offerings along with AI-enabled menu changes and suggestive selling," he said on the call. "As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase further supporting sales and profit growth across the system."

Dynamic pricing is "the practice of varying the price for a product or service to reflect changing market conditions, in particular the charging of a higher price at a time of greater demand."

Wendy's doubled down on dynamic pricing in a statement provided to FOX TV Stations on Feb. 26:
"We will begin testing a variety of enhanced features on these digital menu boards like dynamic pricing, different offerings in certain parts of the day, AI-enabled menu changes and suggestive selling based on factors such as weather," the statement read, in part. "Dynamic pricing can allow Wendy's to be competitive and flexible with pricing, motivate customers to visit and provide them with the food they love at a great value."​

Wendy's faces backlash after 'surge pricing' reports, denies claims , Fox News, February 28, 2024


Fast food chain Wendy’s says they aren't implementing surge pricing, but instead dynamic pricing, and in many cases driven by artificial intelligence.

The chain says AI can be used to be flexible with pricing, enhancing the customer experience... but not everyone is on board. The first reports of the concept of fluid pricing changes received pushback by consumers, concerned their lunch, or dinner time could be targeted.

Caleb Silver, editor-in-chief, Investopedia: "Clearly the company is trying to find ways to boost a share price and improve its profit margins. This is one way of doing it, but it could come at the expense of losing some faithful customers." And now, lawmakers are reacting. Even with Wendy's saying they aren't implementing surge pricing, and say they never used the phrase, there are concerns the concept could catch on. Assemblyman Angelo Santabarbara says there need to be guardrails to protect consumers.​

Wendy's AI-driven dynamic pricing proposal sparks consumer concerns and legislative action , WRGB, March 3, 2024


Many people do not realize that the cost of the food itself only makes up a small percentage of the total business costs of a typical fast food restaurant.

This seems to make sense to me. If restaurants have too much business and are overwhelmed at certain times of the day, and are not busy enough at other times of the day, it makes sense to adjust prices to compensate.

Prices at Wendy's are already so low, I don't see how anyone could complain. Wendy's is the best combination of value and quality of any fast food.

Would these people who are complaining just prefer Wendy's to raise their price across the board rather than only raising their prices at certain times?

It's funny how fast food customers are so entitled.

For those who hate "corporations", does anyone seriously believe if the government ran a fast food place it would be cheaper?


I've noticed that many people seem to have a huge amount of emotion when it comes to fast food. Sure, people complain about the prices of other things, but fast food provokes a disproportionate reaction, given the small relative cost. Even when the prices are very low, people seem to have a huge sense of entitlement. Stories about customers acting crazy and throwing a huge tantrum when the restaurant makes a mistake on their order are not uncommon.
I think it has to do with human psychology and hunger. When a typical person goes to a fast food restaurant they are hungry and impatient and their body needs food. It's a very primitive and primeval instinct.

Wendy's is a private business. Why shouldn't they be able to set their prices at whatever they want? There is plenty of other competition. Do people understand how prices are actually set in a free market, with supply and demand? Why would the specific practice of dynamic pricing end up resulting in customers paying overall higher prices, any more than the business just deciding to raise their prices? How is that exploitative?


another related thread with some of my thoughts:
Scalping goods during a panic - price gouging serves a functional purpose (by Puffer Fish, in Economics & Capitalism, 4 June 2021)

[late]

I am considering the possibility that the fast food business model is no longer working.

McDonalds just improved their quality, which means they also charge more. I don't do social media, but even I have seen Youtube videos complaining about it. I don't go to McDonalds, but I was curious about their quality (there aren't a lot of really good burgers around here, at least not at a reasonable price. No In and Out, no Shake Shacks).

It was mostly the same, the quality of the meat improved, but that just means it wasn't horrible (do you ever go to fast food places??). Where there had been one slice of pale, lifeless tomato, there were three thin slices of tomato that had a little tomato flavor. Definitely a better experience, not enough better to make me want to go back.

I digress..

The people that go to fast food places want cheap. But the way things are, the prices have to go up. I suspect this puts a lot of fast food places between a rock and a hard place. Price increases are going to drive away a lot of their customers, and I am wondering if this means they are going to have to come up with a new way to meet demand.

[Potemkin]

Meh, it’s just the law of supply-and-demand, in real time. Modern technology has made this possible for the first time, but it was always-already implicit in capitalism. If there are long queues, it means they can increase prices without effectively losing business. Ker-ching!!