Mouthing Off | As Wendy’s boss learned, diners won’t buy ‘dynamic pricing’ – or gouging – even if they accept being exploited at Christmas and on Valentine’s Day
- The CEO of US fast food giant Wendy’s was forced to backtrack on his proposal for ‘dynamic pricing’ in its restaurants after a huge social media backlash
- It shows how unwilling diners are to accept price hikes, except in airports, at Christmas and on Valentine’s Day
Another national crisis nearly wrecked the United States last week, and it didn’t involve President Biden, Donald Trump, Congress or Taylor Swift.
This near emergency was caused by the chief executive of fast food chain Wendy’s, Kirk Tanner, when he said he was considering a “dynamic pricing” plan starting in 2025.
The price of its burgers would fluctuate based on demand at specific times, kind of like an Uber ride which may surge in price at rush hour and be offered at a discount on a quiet weeknight.
Before you could ask “Where’s the beef?”, there was a massive and immediate backlash on social media against the company that gained all-American admiration for inventing the Baconator sandwich. A day after the news broke, Tanner was forced to eat crow as he backtracked on the plan and clarified that “dynamic pricing” didn’t mean “surge pricing”.
In short, Wendy’s promised it wouldn’t jack up the prices of its meals at peak lunch or dinner time. Instead, it was suggested Tanner was only thinking about offering discounts when business is slower. Nice try at recovering from a bad PR mistake. Would you like fries with that foot in the mouth?
There are other industries that can more easily get away with “dynamic” pricing – in addition to taxi rides, think how randomly the cost of airline tickets, hotel rooms, or tickets to Taylor Swift concerts can increase for no good reason. However, food and beverage providers are often held to stricter scrutiny.