Lean On Me – Dynamic pricing is a slippery slope

Most of us are pretty familiar with the cost of our go-to meal before we even pull into a drive-thru.
Some recent announcements from Wendy’s threw that certainty into question.
Leaders at the fast food chain recently announced a plan to roll out “dynamic pricing.”
A number of national media outlets initially compared the plan to the “surge pricing” that ride-share apps like Uber depend on, which increase the cost of services at times of higher demand.
Dynamic pricing was initially described as a model that would allow the restaurant to adjust the cost of its offerings depending on factors like time of day or even the weather.
The initial announcement from Wendy’s was a bit scarce on exactly how this would affect the cost of meals, but it definitely seemed to me like a better deal for the fast food chain than it would ever be for my wallet.
My brother had some choice words for Wendy herself upon finding out this plan and I can’t imagine it was received kindly by many customers, especially given Wendy’s response.
Only after the plans were widely circulated, the company specified that the restaurants do not plan to raise prices at high-demand times.
Instead, a later statement indicated that Wendy’s $20-million investment in digital menu signs “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.”
It’s tough to believe that offering discounts was the purpose of dynamic pricing all along, especially in an environment where consumers are already being worn thin by spiked prices and “shrinkflation.”
While Wendy’s might be able to depend on a level of brand loyalty, there is only so much that customers are willing to tolerate.
The Associated Press recently published an article titled “Consumers are increasingly pushing back against price increases – and winning.”
In it, the reporter details a significant shift among consumers from name-brand products to their store-label alternatives.
The article cites data from several large companies, including Unilever and General Mills, whose leadership have acknowledged that customers are actively seeking bargain alternatives.
Executives at PepsiCo – where sales fell in the final three months of 2023, according to the AP – said they plan to spend 2024 reining in prices in order to boost sales.
I shop almost exclusively for generic, store-brand foods and am no stranger to feeling powerless against companies that seem to have capitalized on the pandemic to boost their margins even further.
Maybe that’s smart business but at a certain point it feels like taking advantage of the consumer. Fortunately, companies can’t survive without consumers.
We are lucky to live or work in an area with an abundance of choices.
Whether it’s swapping out Jif for Kroger-brand peanut butter or going to a different restaurant for a burger, one of the quickest ways to make our opinions known is to patronize a competitor.
If dynamic pricing is ever used to boost the cost of meals during the lunch rush, I’m sure ringing up a $5 Biggie Bag at $6 could mean a huge boost for a company the size of Wendy’s – as long as customers keep coming back.
Instead of a potentially short-sighted profit, it feels like prioritizing increasingly choosy consumers is even more important.
So, if Wendy’s planned pricing changes don’t actually benefit the consumer, it won’t be too hard to find another place where you can have it your way.
-Kayleen Petrovia is a reporter for the Journal-Tribune.