Surge pricing for fast food? Wendy's may charge more for that Baconator during lunch rush

That Wendy's Baconator may cost a little more during the lunch rush next year.

The Dublin-based hamburger chain told analysts that it plans to introduce "dynamic pricing" in 2025, charging more for some items during busy stretches such as lunch.

"Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and day-part offerings along with AI-enabled menu changes and suggestive selling," Wendy's President and CEO Kirk Tanner told analysts on Feb. 15.

Raising prices when demand is high, often referred to as "surge pricing," is common in other industries such as the rideshare, airline or hospitality industries. Ohio State University, for example, charges more for high-demand football tickets.

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Some restaurants charge more for the same dinner than lunch, and many offer discounts during less-busy happy hours. At least one British chain, Slug & Lettuce, announced last year that it would start charging more for beer during peak hours.

But Wendy's "surge pricing" may be a first in the fast-food industry. Wendy's, like other fast-food chains, already charges more at some locations than others.

Wendy's released no details on how the pricing would work, including what menu items would be impacted, beyond saying the strategy is part of its focus on digital innovations.

"As we’ve previously shared, we are making a significant investment in technology to accelerate our digital business," the company said in a statement to The Dispatch.

The company suggested that dynamic pricing could include discounts during slow periods of the day.

"In addition to evolving our loyalty program, one of the other benefits of these investments will be the flexibility to change the menu more easily and to offer discounts and value offers to our customers through innovations such as digital menuboards, which will roll out in some U.S. restaurants," the company said.

"Wendy’s has always been about providing high-quality food at a great value to our customers and this recent investment will continue that by driving traffic and providing value during slower parts of the day. As early as 2025, we plan to test a number of features such as AI-enabled menu changes and suggestive selling based on factors such as weather that we think will provide great value and an improved customer and crew experience."

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Tanner said Wendy's plans to invest $20 million to roll out digital menus to all its U.S. company-owned restaurants by the end of next year, he said.

"We expect our digital menu boards will drive immediate benefits to order accuracy, improve crew experience and sales growth from upselling and consistent merchandising execution," Tanner said.

jweiker@dispatch.com

@JimWeiker

This article originally appeared on The Columbus Dispatch: Wendy's to follow Uber with surge pricing strategy in 2025