Fast Food pricing..Part 2: Dynamic (surge) Pricing model
stryper
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Will customers love it or loathe it…
They seriously have to ask?
They seriously have to ask?
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Right now only one in my area does it but it also happens to be my favorite course. Basically every tee time you book in advance went from $55 to $75
If the prices need to be raised, do it. Don’t do this. I’m picturing the parents just getting home from work and racing to get their kids to little league and doing a drive thru at “peak time”. Not a good look
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Companies will continue to increase the profit they can make off their customers as long as they can. Pricing is set by both the consumer and the supplier. As long as the consumer demands the supplier can keep raising prices. When the consumer stops demanding the producer has to adjust pricing. My gut says people have reached the part of this inflation cycle where they are saying enough. It's already played out in the apparel market where steep discounting from post pandemic pricing is commonplace over the last 12 months. The next step will be suppliers exiting the market. I'm curious which part of the food marketplace cracks first in groceries or restaurants. Several restaurants are already seeing their customers move away due to pricing and are committing to no increases and finding ways to offer more value (McDonald's was one in their recent earnings).
Yeah, that's going to be a NO! from me. I've absolutely no interest in surge pricing for fast food. While I've mostly eliminated it from my diet over the past couple of years, I'm not going to be informed enough of the current price to know whether it's a low, medium, high, or surge price. I'll make it easy and just not eat it.
And I'm seeing articles on the internet stating that consumers have had enough and companies are beginning to take notice... and their "projected" price hikes are being minimalized. I dunno. The whole idea sucks and smacks of price gouging to me. It's not like they've made enough off of us during the pandemic. Now they want to make even more. Yeah, I know business is in business to make money but come on man!
I vote to not participate. And I won't.
And I'm seeing articles on the internet stating that consumers have had enough and companies are beginning to take notice... and their "projected" price hikes are being minimalized. I dunno. The whole idea sucks and smacks of price gouging to me. It's not like they've made enough off of us during the pandemic. Now they want to make even more. Yeah, I know business is in business to make money but come on man!
I vote to not participate. And I won't.
On one hand they are trying to maximize profits. On the other hand I have a choice, and if they price gauge me, I won't ever go. I've already reduced the number of times I go fast food to just a few a month already, would probably drop it down to zero then.
He probably got the idea from his local course.
Giving me Yet another reason not to eat at Wendy's
You know whatvwe haven't done, spared a thought for the poor CEO. Struggling to make ends meet, having to deal with difficult board meetings, tough budget decisions and unreasonable earnings targets.
A form of this surge pricing is already very common, it’s why you see a Big Mac meal for $8 in one place and at busy locations like in a downtown or airport location it could be as high as $17. Restaurants are shutting down at an alarming rate. It’s difficult to make a profit when minimum wage is up to $12-$15, food costs are up along with rents and of course the demand for better returns on investments. In the end we the consumer lose out because we have to give up on the convenience of fast food because we just can’t afford it anymore.
Several people saying, "I don't eat at Wendy's" or "I don't eat fast food" may be missing the bigger point. If dynamic pricing is successful here, it will likely continue to spread to other restaurants or industries...eventually landing at something you care about.
Dynamic pricing isn't new. But the ability to quickly scale it AND (big one) consumers willingness to accept it are going to tell a lot. The airport example was perfect. They know you're a captured market...so we all pay airport prices for things. How does that work outside of that.
Would a 20% surcharge stop a surburban mom from getting in that long line to get Chick Fil-A for the kids at 5:00? From what I've seen - probably not.
Dynamic pricing isn't new. But the ability to quickly scale it AND (big one) consumers willingness to accept it are going to tell a lot. The airport example was perfect. They know you're a captured market...so we all pay airport prices for things. How does that work outside of that.
Would a 20% surcharge stop a surburban mom from getting in that long line to get Chick Fil-A for the kids at 5:00? From what I've seen - probably not.
Airport example is true in part. captive audience means they can charge more. But at the same token, the airports know that they can charge a premium for rent to these restaurants - so in order to be profitable, they are forced to have higher prices anyway.
And maybe that soccer mom packs a PB&J sandwich for the kids instead of paying overpriced chick-fil-a. At a certain price point, consumers will stop (at least this consumer does).
This is correct - they are trying to increase profits in 2 ways: charge more in prime times and drive more business to less busy times.
The failure here is prime times (particularly lunch) are the times people can take off from work. I think this would backfire in both ways, less people in prime times and the same in non-prime times. The 2nd way, is unless these ff places are people crack, why would you now go to a Wendys and pay $50 for a meal when you could go to a high quality establishment for the same?
Anyways - stupid idea all around.
I googled it and they aren't announcing which locations are moving to the new model. However, those stores will have new signage that can handle the dynamic pricing (vs. current signage with static pricing).
I despise dynamic pricing in general. I will cease to frequent any restaurant that employs such tactics; even though I rarely eat fast food.
The US has so many places to eat now it does feel a little silly. I'm sure they did some analysis here but who knows, maybe not.
Usually if there is a Wendy's, right down the street there's a Mcdonalds, or a Chipotle or a whatever.
I agree, who wants to pay like 20 USD for a Baconator combo
As I get older I am moving away from FF anyway. But looking at this another way, FF places can either up the price across the board by $1 at all times you go, or keep the price as is at off hours and then increase busy time pricing by $2. At the end of the day they net out the same amount of revenue, but now (in theory) consumers have a choice - go off hours for lower prices, or go for convenient times (and that's what these are) and pay a bit more.
I don't know if this is right, just bored at work at the moment!!
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Fast food has already gotten too expensive for the quality of food you get over the past two years. I'll be damned if I am going to pay a premium price for what has basically turned into hot trash.
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I’ll be watching this unfold with great interest. Fast food is so ingrained in the western world now, and it will be interesting to see what (if anything) they could do to push people back into their own kitchens.
Fast food in general has always been a stupidity tax IMO, and I can’t wait to see what it is that finally smartens us up.
Fast food in general has always been a stupidity tax IMO, and I can’t wait to see what it is that finally smartens us up.
Despite my longtime allegiance to all things dynamic, this is an awful idea. I would at least somewhat understand if it meant that certain items would fall below their current menu pricing. But we all know that the current prices will only be the floor and go up from there. It is nothing more than a convenience tax, and I am already paying a hefty health cost by eating at a Wendy's to begin with, which is all the convenience tax I can stand.
Wendy's can F all the way off with this.
Wendy's can F all the way off with this.
I think it would push people to go to other places that had a constant price, even if they wanted Wendy's. Fast food is already getting expensive for an inferior product. I certainly wouldn't want to pay more just because it's a certain time of day.
& can we just be honest? Wendy’s isn't that good to begin with.
Update:
The burger chain clarified its stance on how it will approach pricing after various media reports said that the company was looking to test having the prices of its menu items fluctuate throughout the day based on demand.
“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,” the company said late Tuesday in a prepared statement.
* * *
Wendy’s said that its 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.”
The burger chain clarified its stance on how it will approach pricing after various media reports said that the company was looking to test having the prices of its menu items fluctuate throughout the day based on demand.
“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,” the company said late Tuesday in a prepared statement.
* * *
Wendy’s said that its 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.”