Surge pricing for your Frosty? Why Wendy's lunch rush could cost you more

TaRhonda Thomas Image
Wednesday, February 28, 2024
Surge pricing for your Frosty? Wendy's lunch rush could cost you more
Surge pricing for your Frosty? Wendy's lunch rush could cost you more

PHILADELPHIA (WPVI) -- There's a big change coming to one of the biggest fast-food chains in the country.

Wendy's is set to test surge pricing, so the cost of your burger would change depending on the time of day.

Wendy's, the country's second-largest burger chain with 6,000 locations, announced that starting next year menu prices will fluctuate during the busiest times of day.

That means you could be paying as much as a dollar more for that Baconater during the lunch rush.

St. Joseph's University Food Marketing Department Chair John Stanton says it's an unusual move for a fast food restaurant to engage in a strategy that involves raising prices at peak times instead of lowering prices to drive more traffic.

"You don't see it as often for food with a surge in price high, in part, because there's so much competition for food," said Stanton.

Our 6abc data team found that over the last year, fast food prices have increased 5.8% and grocery prices have gone up 1.2%. Since 2020, fast food prices have increased 30% and grocery prices are up 25%.

"What's really happened now is fast food is no longer cheap food," said Stanton. "It's just fast food and sometimes not even that!"

Wendy's CEO announced his company will spend $20 million on high-tech, digital menu boards that can update prices in real-time, meaning surge pricing, which used to be reserved for rideshare companies, airlines, and hotels. It could be coming to a drive-thru near you.

During the busy times, they can increase profits then. And some consumers will want to shift to the less busy times when prices are lower.

Customers who spoke with Action News have mixed feelings. Some say it's OK. Others are outraged as the price of yet another meal rises, making it harder to find the value in those value menus.

"I think it's ridiculous and I think I would never go to any of the places that do that," said Steve McGarry of Huntingdon Valley, Pa.

"I'm not even gonna lie to you, it just depends on how bad I want it," said Amoni Valentine of her willingness to possibly pay more for certain menu items.

If customers have the opposite reaction, the strategy could be hard for Wendy's to maintain, according to Stanton.

"If they get a large negative feedback and people aren't buying the food as much, then I think they'll just stop it," he said.

Otherwise, customers will have to find other ways to save on fast food, like using apps, which Stanton says are good options for saving a few dollars.

"[Restaurants] like to put deals and savings on those apps," he said, "because they know that they're the best customers."

Wendy's told ABC News in a statement that the decision can allow them " be competitive and flexible with pricing, motivate customers to visit and provide them with the food they love at a great value."

ABC News contributed to this report.