Although the comments were vague, the term “dynamic pricing” is generally understood to mean that prices can fluctuate based on the time of day and the strength of consumer demand. Customers were quick to decry Baconator’s potential to apply “surge pricing” like Uber and Lyft.
Wherever you get the beef, it’s likely to be a little more expensive, at least during busier times of the day.
Everyone, including the burger chain’s competitors, tried to take advantage of the fast food comeback.Chile’s laughed at it on social media. Burger King used the opportunity to announce a new deal for Whoppers. “We don’t believe in charging more when you’re hungry.” the company said With a cheeky tweet.
Meanwhile, progressive commentators have incorporated the debate into the ongoing anti-Greedflation movement.
Sen. Elizabeth Warren (D-Mass.) said, “@Wendys is going to try ‘surge pricing,’ which means you can pay more for lunch even if the price at Wendy’s is exactly the same.” said. I wrote to X. “This is price gouging, plain and simple, and American families have had enough.”
Sen. Bob Casey (D-Pennsylvania) wrote a public letter to Wendy’s in which he called the Frosty’s price fluctuations “predatory and greedy.” Perhaps most ominously, Lindsey Owens, president of the left-wing advocacy group Groundwork Collaborative, declared:The end of fair prices in America”
Wendy’s scrambled to contain the fallout. The company said in a blog post that news outlets had “misinterpreted” its CEO’s words and that it had “no plans” to “raise prices at a time when restaurant demand is at its highest.”
“Any features we may test in the future will be designed to benefit customers and restaurant staff,” the company said. “Digital menu boards allow you to change your menu offerings from time to time and more easily offer discounts and valuable offers to your customers, especially during low-time periods.”
Consumers rejoiced at Wendy’s apparent reversal, or, as one newspaper characterized it, a “gulp back.” “The national nightmare is over,” the news site declared. morning brew.
The important thing here is that if you read Wendy’s statement carefully, it’s not actually a reversal. Wendy’s plans to continue experimenting with different prices, which makes perfect sense. In fact, it’s very common!
Note that Wendy’s says it offers discounted prices “particularly during slow times of the day.” In other words, when demand is low, prices are lower to attract more customers when there is free capacity. Many restaurants do this, including other burger chains. Usually called “happy hour”. Or an “early bird special.” We also do this outside of restaurants. Consider weekday midday sales at your local movie theater or cheap flights on low-traffic days.
Lowering prices during quiet times of the day is arithmetically equivalent to raising prices during busy periods. But for whatever reason, consumers seem to be more willing to accept a “discounted” price, where demand is low, rather than a “surge” price, where demand is high. They are also angry that some consumers are being charged higher prices, but if framed as some consumers being charged higher prices, They seem to be okay with discrimination. few (Senior discounts, student prices, etc.), as long as it is possible to predict to some extent what prices will be available to whom and when.
In other words, there are good and bad ways to market variable prices. The Coca-Cola Company is infamous for causing a PR crisis when executives mulled over a vending machine program that would increase the price of soda on hot days. Wendy’s misconduct was not really about its pricing strategy itself, but how it was presented to the public.
Competitors that have taken advantage of the Wendy’s controversy know this. In fact, Chili’s offers its own happy hour discount. Burger King is also experimenting with similar deals. But it’s hard to blame companies for taking advantage of public confusion about their competitors’ pricing strategies. This is not hypocrisy. That’s smart marketing.
But we should expect more from the pompous Greedflationists who claim to be serving the public by denouncing Wendy’s pricing actions.
Happy hour drink deals have been banned in Massachusetts for decades (a vestige of drunk-driving fatalities in the 1980s), so my guess is that Warren might get the green light. But even she has probably ordered the lunchtime special at the local brewpub or been found complicit in a sneaky price difference strategy.
Wait until the populists learn about “peak” and “off-peak” train fares. I’m also looking forward to their tweets expressing their outrage at the government’s “price gouging.”