Wendy’s considers dynamic pricing pilot without 'surge pricing'

The Wendy’s Company may test a dynamic pricing strategy using digital menu boards.

In its recent fourth quarter earnings update, the quick-service restaurant chain said it is adding digital menu boards to corporate locations across the U.S., which will provide more flexibility to change the display of featured items. 

In a statement on its website, Wendy’s said this strategy has been “misconstrued” in some media reports as an intent to raise prices when in-store demand is highest. 

"We have no plans to do that and would not raise prices when our customers are visiting us most,” Wendy’s said in the statement. “Any features we may test in the future would be designed to benefit our customers and restaurant crew members. Digital menu boards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.”

In an email to NBC News, Wendy’s further clarified its plans to conduct dynamic pricing via its digital menu boards, which will cost about $20 million to roll out during the next two years, with another anticipated $10 million in expenses related to enhancing its digital menu boards globally.

"Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. We didn’t use that phrase, nor do we plan to implement that practice," a Wendy’s spokesperson said in the email to NBC News. "Beginning as early as 2025, 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. We will test a number of features that we think will provide an enhanced customer and crew experience."

Wendy’s partners with Google to pilot AI-based drive-thru

Wendy’s is also expanding an existing partnership with Google to pilot a solution, called "Wendy’s FreshAI," which is based on Google Cloud's generative AI and large language models (LLMs) technology. The pilot utilizes Google Cloud generative AI solutions, such as Vertex AI, to automatically conduct conversations with customers, understand made-to-order requests and generate responses to frequently asked questions. 

Google's foundational LLMs which have the data from Wendy's menu, established business rules and logic for conversations are supporting the pilot, as well as integration with the retailer’s restaurant hardware and NCR Aloha POS system.