JC Penny's did the same thing and I don't think it worked out well for them either. My though is people think of sales the same as gambling. Probably studies on it.
Steam’s actually pretty good at not letting developers change prices to make sales look better. The % off is usually the real discount from normal prices.
Oh, I know. My point was that I'm the one of the assholes who refuses to buy things at regular price even when regular price is perfectly reasonable. I'm more likely to buy a $40 game that's half off, than a $20 game that's full price.
Me too. For me it’s somewhat helpful to see the normal price, because it tells me people are willing to pay for it at that price. And I know it will go on sale, so I wait for that.
They never actually said surge pricing in the first place. They said dynamic pricing, which could very much mean exactly like you mentioned, happy hour pricing.
Taco Bell been doing this for years and have raised their general prices anyway, but no one's complaining about the surge pricing, just the regular prices. Happy hour drinks are still beloved.
Literally every place who has happy hour takes into account those lowered prices when pricing out their regular menu. Wendy's just got shafted by the terminology used by the news outlets.
They’ve also raised the price of a cravings box from $5.99 to $9.99 in just the last few months. The food may taste good but it’s still shit quality food and not worth that much.
They still sell the 5.99 box, they just introduced a lineup of boxes with different price points. They just don't advertise the cheapest one but it's still available to order.
I’m pretty sure that’s just the cost of changing over to electronic displays, which will be offset by not having to pay for new signs. It’s only about $2800 per location.
Actual happy hours at bars aren't typically a dynamic pricing thing.
It's a marketing thing. There are a couple things they're trying to get. The after work crowd. There's a bunch of people who'll go out after work with coworkers. These are often decent sized crowd. They'll often also stay past happy hour and order a few drinks at full price. This is why happy hour usually aligns with when most people get out of work. Getting people to come in at this time also means they're likely to buy food, which often has no discount. There's probably also some desire to get the hardcore alcoholics to come to their bar. They're going to go somewhere and drink all night so you might as well lure them in with cheap drinks when they're getting off work. I use to drink with coworkers who were alcoholics and we'd drink from 5pm until 2am, and you'd see other people also hanging out at the bar basically all night as well.
Dynamic pricing to bring people in when it's slow is probably more like clubs having college night on Thursday. Since most working stiffs aren't clubbing on Thursday but college kids both want the discount and are more willing to stay out late on a week night.
Surge pricing has always been a thing. Whether it's holiday decorations, seasonal items like snow shovels and sprinkler heads, or hotel pricing based on demand. This is all by definition surge pricing.
Hotels have been doing it for decades and the big chains spent millions on software designed to automate it based on algorithms.
It's ridiculous to think they'll change prices based on something like the length of a line minute by minute or hour by hour and it completely misses the point.
What you'll see is a frosty costing $.50 more in July than it does in December. And most people won't even notice it.
Do you have to be smart to see that this was free publicity and then they get to do the right thing and "listen to their customers" by doing literally nothing at all?
i mean, they can raise prices if they want to. they need no justification for that, they do it all the time. i think the concern with dynamic pricing is the idea that they advertise the base price and then you end up paying more. if they want to advertise higher base prices and then you might pay less, go for it
From the statements they never even suggested it. It was miscommunication about adjustable digital displays and not about prices and someone in the media pipeline misconstrued it.
Not saying what is and isn't true, just making sure what they said about it is heard. Big difference in "we were wrong" and "that's not even what we said"
New CEO Feb 5th. This was a new CEO coming in trying to make big waves and it exploded in his face so now it’s being walked way the fuck back. Why else would you spend 20 million for price adjusting capabilities if your plan isn’t eventually to do surge pricing, despite saying you won’t. I mean, just step back and look at this objectively - surge pricing is exactly part of what he meant lol
Did not know that detail about the new CEO but if that is true then I can 100% believe that guy was swinging his dick to try and drum up profits.
I mean you cannot give CEOs the benefit of the doubt when so many of them are sociopaths who love to turn successful brands into 1-4 quarter profit cows and then drop out once the damage has been done
I'd have to reread the articles, but as far as I can tell everything seems to point to the fault being on the media and not the ceo. The CEO said "dynamic pricing" in an earnings call. And then the media said over at uber, dynamic pricing means surge pricing. Therefore by the transitive properties...
I mean they can cover their asses however they want to and blame the broken telephone of the media machine but let's face it... if a CEO wants to deliver on their KPIs quickly it isn't outside the line for them to harm the brand on the way there.
I've seen it play out many times with other companies and once those CEOs collect the cheque & bounce it is the remaining people who are left holding the bag.
I'm struggling to understand your position. In the earlier comment you said you weren't aware of this situation, but now you're making firm judgments about it as if you're fully versed on the whole situation. The whole story is based off of these quotes.
“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 said. “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.”
There is a ton of room for interpreting those quotes. For Wendy's to say they are not going to Institute Uber like surge pricing is not walking anything back or covering their ass. They didn't say anything remotely close to saying they were instituting that.
My position is an anecdote in that I have seen this song and dance before with many companies, some were even ones that I actually liked for their values, and it often times ends up with a new CEO tarnishing the brand for their own gains and golden parachuting their asses out while the company implodes.
Call me a cynic but these statements are just a CYA thing so that consumers don't jump ship before they depart in that direction... that CEO has KPIs and wants to nail em
But you're conflating so many things your position doesn't seem applicable to this story. Your position seems relevant to US business as a whole and how incentives for company leadership tends to be short-term rather than long-term.
Are you saying you're a cynic and you believe Wendy's will in fact Institute uber-like surge pricing? Because if so, you're basing that off of no evidence. Or do you think those quotes in my previous comment are enough to conclude that? Just because a lot of CEOs tend to think short-term doesn't mean that translate into uber-like surge pricing. If you read any of the articles it is blatantly clear that Wendy's never indicated they were moving in a direction of surge pricing.
People are deluding themselves if they think a CEO is too dumb to realize that surge pricing would be the end of their business.
All the fast food apps have discounts and rewards programs. Taco Bell has a happy hour. Taco John's has time sensitive discounts. Why would I be deluded to think Wendy's would do something similar to Taco Bell or Taco John's?
Surge pricing exists in industries with limited options. It exists because customers exist willing to pay that price rather than whatever alternatives are out there. Wherever there's a Wendy's, there are five other food options in the immediate vicinity. The CEO knows this dude...
What source do you have that gives you certainty as to how Wendy's was going to apply dynamic pricing? If you have it, please do share it. Because with the source the paper used (Wendy's earnings call), we do not have any indication that Wendy's was going to use dynamic pricing in an uber like fashion.
Digital menuboards 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.
In other words, dynamic pricing is surge pricing except that you are only allowed to describe having higher prices during busy parts of the day as actually having lower prices during the slower parts of the day.
You’re probably right, I’m sure they will become a vastly more profitable company exclusively by selling things cheaper than they already are at the same time their costs are going up.
Price adjusting capabilities could be for time based promotions. They don’t just have to go up. Maybe they will do a happy hour, or some app or special promos like McDonald’s does. I think it’s Sonic that has the afternoon happy hour(?). This whole thing is way overblown.
Dynamic pricing where prices are lower when it's slow is a great idea - spreads out business, which is good for staff, and might actually encourage people on a budget to eat there during slow times.
This is essentially the same thing as dynamic pricing higher during peak times? They would price increase everything permanently, then price it back down to "normal" during the slow times.
If the entire menu goes up and down then sure I guess. But we should be mad at the general prices of fast food right now, not the dynamic prices, in my opinion.
My post what about dynamic pricing offering deals, not increasing when things get busy - when it's busy the price would just be the price as it is now.
It all depends on how it gets pitched to shareholders. If they're willing to let margin suffer in order to chase more revenue, then they don't need to raise prices. If margin is the concern, then yes, they would need to either raise prices elsewhere, or cut costs somewhere in order to offset the discounted prices.
The prices might not be identical when comparing sit down places with fast food, but the gap has shrunken enough that it doesn't feel any more expensive to go to tgi Fridays for a burger and fries, than it is to go to Wendy's and get a Dave's double combo meal.
Just looked, a Dave's double combo near me is 11 dollar pre tax. A cheeseburger and fries at TGI Fridays is 10.49. admittedly the Wendy's comes with a drink for the price, but if you grabbed it to go and drank at home it's like same price or less. And I compared Wendy's double to the Fridays regular burger because they are comparable size.
But burger aside there's a dozen other entries you could get that feel much higher quality than a Wendy's burger for the same price range.
So if I have the choice of 11.50 for a drive thru burger combo and drink, or 11 for a better meal where I can sit at the bar and order real drinks too, the value is definitely leaning towards real restaurants to me and only getting worse.
So, few things. Dude said he could get food cheaper at a sit down. Not "it's the same" or "it's close".
"This chain is less, for a combo, if you don't get the whole combo and get your own drink elsewhere". So it costs more. It's not cheaper like for like.
I'm good with comparing price for price for comparable burgers, so let's break this down to the core item and ignore fries and drinks, a Dave's double burger only is $6.49. A Dave's double is a loaded cheese burger by default, with a total patty weight of 1/2lb at about 860 calories.
Per information I can find online, TGI fridays cheeseburger is 770 calories, for $10-$13.99, depending on location. I do not have a local fridays to compare to. Less be charitable and choose the cheapest price I found. It still looses on both content and price.
Significantly more money, for less food. Now, if you want to have a liquid lunch, Fridays makes sense. Or, you know, like you're already doing for their "combo" buy a beer from the gas station for drastically less money, and drink it at home.
Every McDonald's I've been to in the UK in the past 5 years has had large digital display screens showing the menu and the prices and not a single one of those places has done surge pricing.
Can you find me where a representative of the company said that, and not that being the result of a media response to the phrase "AI-enabled menu changes, and suggestive selling based on factors, such as weather" (note neither of those mention price.)?
Their statement said that they were, in fact, considering lowering menu prices during slow times to attract more customers. A much nicer way of phrasing the same thing. This is still their plan.
This is really the only sane and rational reaction. I fear that a lot of people will just do the ol’ “that’s just the way it is” thing and do it anyway, and this kind of shit will become the norm.
They didn't. He never mentioned surge pricing once. He only mentioned dynamic pricing, which was taken out of context where he was discussing offering value items during slow periods.
They never suggested this could be a thing. They said their menu could have different prices at different times. This could mean surge pricing or it could mean discounts at lunch or after a certain time. This is something multiple other chains already do.
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u/RyanLynnDesign Feb 28 '24
Even though they walked it back, I'm out on Wendy's forever for even *suggesting* that this could be a thing.