Way Off Topic: Surge Pricing

[HooperScooper]

Mmm, could really go for some Wendy's now.

 

[nomar]

Sounds insane, but it's already used for flights, hotels, sporting events, etc. I listened to a piece on the news today that said it will continually be refined by AI so the swings in price shouldn't be that noticeable (to where you suggest the person behind you pays more for the same thing).

The counter to it is tracking and projecting where and when they'll be the lowest so the consumer has some "power" in the final price.

Sure you can do that for flights, but if you’re tracking Wendy’s orders so you can pay 50 cents less for your chili and junior bacon cheeseburger, then, dang, you’re in a bad place.

 

[Deepster]

If you’re tracking Wendy’s orders so you can pay 50 cents less for your chili and junior bacon cheeseburger, then, dang, you’re in a bad place.

Nah. You can track most anything. And there are people who eat at a McDonalds 10+ times a week. Multiple times a day most days.

 

[Leebo]

Mmm, Baconator and nuggets on the side...

 

[CL82]

There will be Food Scalpers soon selling cheap morning Burgers to lunchtime people.

'Merica

 

[J187Money]

Love it. The data they get from this will be illuminating whether it works or not.

 

[JohnFSilver]

This is insane. You could pay more than the person in front of you in line for the same order. The only way this could work is if they set a price and said the price may drop when business is slow.

https://www.cnn.com/2024/02/27/food/wendys-test-surge-pricing/index.html

This screams of a leader with an MBA that is trying to use technology to gain revenue over just making. Better products.

Lol.

 

[BigErnMcCracken]

Nah. You can track most anything. And there are people who eat at a McDonalds 10+ times a week. Multiple times a day most days.

You know people who eat McDonalds multiple times a day “most days”?

 

[MilliniumPrince]

It will happen and it will work. People are paying almost $15 for some "value" meals. Sales haven't missed a beat.

 

[superjohn]

You know people who eat McDonalds multiple times a day “most days”?

Morgan Spurlock is his homey.

 

[VAHuskyFan]

People hate price discrimination and surge pricing, but like discounts and deals. Same thing to an economist - all depends on how you frame it.

That’s why stores have “sales” and not “randomly-pay-30%-more weekends.”

Not very smart on the part of Wendy’s.

 

[Martin]

As a kid I would dip my french fries in my Frosty.

 

[Chin Diesel]

People hate price discrimination and surge pricing, but like discounts and deals. Same thing to an economist - all depends on how you frame it.

That’s why stores have “sales” and not “randomly-pay-30%-more weekends.”

Not very smart on the part of Wendy’s.

I'd have to look it up for references but they've done analysis on

Buy one get one free
50% Off
Two for the price of one

Even when the sale says you'd have to buy two items for the 50% off or the 2 for 1, consumers still jump on BOBO the most often.

Also remember A&W priced their 1/3 lbs hamburger at same price as McD's 1/4 pounder in the 80's and the promotion failed due in part to consumers not realizing 1/3>1/4.

 

[phillionaire]

this is peak "business brain" and I hope it fails miserably

 

[August_West]

They’re going to do whatever makes them the most money. It very well may be reduced prices during less busy periods to try to offset the overhead/labor during those times.

As usual Arby's is ahead of the curve. For years they have a special from 2-4 PM for 1 dollar sliders.

 

[navery12]

 

[WhereistheDove?]

This screams of a leader with an MBA that is trying to use technology to gain revenue over just making. Better products.

Lol.

This screams of McKinsey or BCG

 

[Hunt for 7]

This screams of McKinsey or BCG

If we have the same understanding of BCG, I will say this. Put a bunch of recent Ivy League MBA’s who have not seen their 26th birthday in a room, hire them to tell you what’s wrong with your business model and boom, all your customers now hate you. That Ivy League education is priceless.

 

[NowInStorrs]

People are already spending like $20-25 on a burger, fries, and a drink getting Doordashed to them. Crazy.

 

[Tyler2Rings]

Good job Boneyard

 

[Chin Diesel]

So, they'll jack up prices across the board and then when traffic slows down, they'll drop them down to the previous prices.

Wendy's, in a statement to Reuters, said on Wednesday it "would not raise prices when our customers are visiting us most.
Its initiative to add digital menuboards to certain stores would instead allow Wendy's to offer discounts to customers more easily, "particularly in the slower times of day," it added.
"We said these menuboards would give us more flexibility to change the display of featured items. This was misconstrued in some media reports as an intent to raise prices when demand is highest ... We have no plans to do that," the company said.

 

[nelsonmuntz]

It is hard to believe that Wendy's used to be the ninjas of fast food marketing and brand management 20-30 years ago, and now this happens.

 

[Dogdeacon]

Sure you can do that for flights, but if you’re tracking Wendy’s orders so you can pay 50 cents less for your chili and junior bacon cheeseburger, then, dang, you’re in a bad place.

Mostly, but think about teenagers with unlimited time. My older son would hit fast food joints between 9pm and midnight last year and played every angle possible going wherever the coupons, discounts, friends giving freebies etc. was the strongest. They'd team up (1 customer for many orders at a time or over a month) for discounts so that they'd all get free drinks and access best deals.

 

[ConnEd]

This (jacking up prices at busier times or, wink-wink, dropping prices at slower times) only works if the other big FF business do the same. If Delta was doing it but American was not, Delta would lose business to American. Someone else mentioned the limited supply of airline seats being a factor - and it is - but the fact that the whole industry jumped on board is a necessary condition for success.

It sounds like a classic "trial-balloon". If others quickly follow suit, they would change the industry. If the others don't, Wendy's is right back where they started - albeit with a bit of a PR mess.

IMO, a lot of this gouging behavior comes from the necessity of public companies to continue to grow - either top or bottom line, preferably both. In "retail", upping the numbers requires continuing to add stores, increasing same-store sales, reducing costs, and/or raising prices. Wendy's restaurants have to have pretty well saturated their market. Increasing sales is hard once a store is "mature" as it means winning competitive sales. Reducing costs gets harder over time. But supply chain issues, rising personnel costs, and inflation have provided perfect foils for price increases well beyond what's needed. If companies didn't have to grow to keep share prices rising (despite their markets not supporting growth), many could have nicely profitable, stable businesses. Instead, they try crap like this where it becomes abundantly clear to everyone that they're just trying to squeeze every last dollar out of you.