Can you guess what we are about to discuss?
Wendy’s new President and CEO, Kirk Tanner, has a bit of “clean up” to do.
WHAT HE SAID:
“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. “As we continue to show the benefit of this technology in our company-operated restaurants, franchisee interest in digital menu boards should increase, further supporting sales and profit growth across the system”.
Our Commentary
Every restaurant operator knows that prices will be taken up over time, to mirror the inevitable rise in operating expenses. He or she also knows enough not to be perceived as a leader in this regard, because some consumers will blame the messenger. When the inflation has become obvious to all, you do what you have to do, even if behind the curve a bit, and no particular operator is disadvantaged from the customers’ standpoint.
UNFORTUNATELY
Wendy’s has become the tip of the spear. The newspaper headline this morning said “During a conference call earlier this month, Wendy’s CEO, Kirk Tanner, said that the Dublin, Ohio based burger chain will start testing dynamic pricing, also known as surge pricing, as early as next year.”
AS A RESULT
The low to mid income consumer, already reducing meal occasions away from home, having spent down savings and increased (21% interest) credit card debt, has just been given a reason to drive right on by Wendy’s.
WHAT YOU CANNOT SAY
“We’ve gotten so good at controlling our operations that we can charge you more when you are hungry.”
WHAT YOU COULD HAVE SAID, AND MUST NOW CONVEY
“We have become so efficient with our technology that we can offer periodic food options at especially attractive prices, when we make an opportune purchase of ingredients, for instance, or at certain times of the day or night when we have excess capacity. We can say to our customers: “Hey, you work with us and we’ll work with you. We want to see you and your family more often, and we’ll give you more reasons to stop by”.
LET’S WATCH HOW THIS ONE PLAYS OUT!
Roger Lipton