Wendy's plans for demand-based surge pricing by 2025

WASHINGTON (TND) — Going to Wendy's might soon become a scheduled event after the company announced a plan to fluctuate pricing throughout the day based on demand.

CEO and President of Wendy's, Kirk Tanner, announced in early February a plan to increase company profits by displaying dynamic pricing, also called surge pricing, on digital menu boards, according to Food and Wine.

Tanner said the company plans to invest around $20 million to roll out digital menu boards to all U.S. company-operated restaurants by the end of 2025,Nation's Restaurant Newsreported.

"Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings along with AI-enabled menu changes and suggestive selling," he stated.

Investopedia describes dynamic pricing as companies setting flexible prices on their products or services that change, according to current market demand.

"Businesses are able to change prices based on algorithms that take into account competitor pricing, supply, and demand, and other external factors in the market," Investopedia further explains. "Dynamic pricing is a common practice in several industries such as hospitality, travel, entertainment, retail, electricity, and public transport. Each industry takes a slightly different approach to repricing based on its needs and the demand for the product."

Tanner, a longtime PepsiCo executive, became Wendy's CEO earlier this month. He succeeded Todd Penegor, who had served as Wendy’s president and CEO since 2016.