This clarification comes a bit too late. A lot of people might still be under the idea that they’ll implement surge pricing as it is commonly used by Uber, so more expensive during lunch, since this news came out a day ago.
Prices are going to be going up to compensate this failure. They were going to try a slow roll out of higher prices anyways then add surge on top of it to make the higher prices feel like a deal outside of a surge.
Coming from 20 years in fast food business, the plan is essentially New Coke. All PR is good PR as they say. They will absolutely see an uptick in business as a result of merely threatening a potential new business strategy they had no functional plan to implement.
This panic story doesn’t even make sense. So as soon as it starts to get busy and they start to make good money they’ll raise prices to drive people away?
People heard “dynamic pricing” and immediately assumed “surge pricing.”
Dynamic pricing, especially in retail, is often used to milk your wallet another way - sales, promos, and bundles. You’re incentivized to buy more.
Given that the press release talked about providing value and incentives to come back, I will be money that this was an algorithmic promo engine. Wendy’s will still get more money from you, but that’s because they want to manipulate your purchasing behavior, not raise prices at noon.
Thinking about it more; I guess it all comes down to their marketing of it, as long as their “full” price is still competitive. Limited time offers are good motivators.
So, not surge pricing but slump pricing. I agree the marketing value, but I think the urge to offset the revenue reduction by raising the "standard" or non-discounted price will prove irresistible to the bean counters.
Yes. Theoretically they can drive people away and make more money if the people they haven’t driven away spend more for less goods.
Let’s imagine on a normal lunch hour I sell 100 burgers at lunch for $4. If I raised my price to $4.50, I’d only sell 80 burgers. If I raised the price to $5 then I’d only sell 50 burgers If a burger costs me $3 then I normally make $1 a burger, but at the middle price I make $1.50, and $2 at the high price.
100 burger x $1 = $100 profit
80 burgers x $1.5 = $120 profit
50 burgers x $2 = $100 profit
The trick is figuring out how changing price will affect demand without pissing all your potential customers off. Restaurants already do dynamic pricing with Happy Hour and Taco Tuesdays etc. They give a “discount” to entice more people to come in when they are less busy.
If they make the same amount by selling less units that makes a hell of a lot more sense.
The average person probably wouldn’t notice besides “damn inflation making stuff expensive”, and they may lose a small percentage of their customers, but if the price difference makes up for it then they’re golden.
I’m going to wager that the plan was never to raise prices at busy times, it was always to use dynamic pricing to put things on sale and bundle stuff. Hear me out…
This is how dynamic pricing is often used in retail. The sales and bundles dupe you into buying more shit, and that raises your order total.
Wendy’s is not Uber or Lyft. There are MANY options that people have for lunch. If they just raise prices at peak times, people will eat elsewhere.
Yeah corporations suck but I think you’re right. This plan was just poorly worded. Congestion pricing does not make sense for a market with so much competition.
You’re absolutely right there but I can definitely see some out-of-touch millionaire executive in an office somewhere having the brilliant idea, “We’re gonna be the Uber of restaurants!”
Everyone assumed this was the surge pricing model, but milking a wallet via a promo engine model is what is more common in retail.
Their PR talked about saving money and luring customers in. I’ll wager that an algorithmic promotion engine was the real play. It would pull customers away from the competition during peak hours, and it would make people buy more by thinking they’re getting a deal.
Being suspicious of corporations is great, but it does seem like a lot of people to take any announcement by a big company, interpret it in the least charitable way possible (even if it doesn’t make sense), and then get mad based on the interpretation they came up with.
If people were really against variable prices as a concept, they’d already be boycott every business with a happy hour, but they’re not. They’re just assuming Wendy’s plans to dramatically raise prices and was dumb enough to draw attention to it. And really, even without an announcement, raising prices beyond the rate of inflation doesn’t make sense, because if they’re remotely competent, they’re already charging as much as people are willing to pay. Wendy’s has every reason to believe that just arbitrarily raising prices faster then the industry as a whole will hurt their bottom line.
I feel like Lemmy started out as a place to have nuanced conversations, which was a refreshing change from Reddit. But I feel like the confirmation bias in many communities is pretty aggressive now. Nuanced and pragmatic comments are not what bubble up to the top.
Nah, I think they were really going to try and introduce surge pricing until they saw how intense the backlash was, then decided to try and walk it back.
Maybe you are right, but I have a tough time giving these giant companies the benefit of doubt when it’s already been shown there was price gouging across the board in the middle of a pandemic.
The very long, very well established history of corporations fucking people over for more profit every time they thought they might be able to get away with it. Did you just forget or are you just asking in bad faith?
Oh, I’m not giving them the benefit of the doubt. I 100% think this was a greedy way for them to milk as much money as possible out of their customers.
My guess is that a promo strategy would be the easiest way for them to bleed a wallet. I say that because I’ve worked for some big shitty ecommerce companies that have tested this stuff, and their PR materials all seemed to talk about “saving” money.
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