Wendy’s sees dynamic pricing—as well as a new customer relations platform, mobile app and loyalty program—as a means of influencing consumer behavior and improving the overall experience. It can move people around the menu through suggestion rather than have everyone dive for Junior Bacon Cheeseburgers and Frostys. It can space out the breakfast, lunch and dinner rushes rather than try to accommodate a growing number of customers within a finite window.

It can turn its traffic jam into slow-but-moving congestion, but experts warn it needs to be completely transparent about the shifts and hazards ahead.

“Where you can make a change relatively seamlessly within bounds that don’t feel like price gouging, consumers are warming up to the idea,” said Steve Caine, a partner at management consultancy Bain and Company and an expert in retail and customer strategy and marketing. “When you start to step outside of that, you’ll feel it and you’ll destroy trust.”

A frosty reception

Both Wendy’s and its consumers realize the escalating cost of ordering from the drive-thru menu. 

According to the Consumer Price Index, the 2.6% increase in food costs in January from the year before was the lowest of any month in nearly five years, but still higher than in pre-pandemic February 2020. Meanwhile, the 5.1% year-over-year rise in the cost of food away from home that month—including a 5.8% uptick in “limited service meals and snacks” at fast-food establishments—almost doubled the rate of food inflation amid rising food and labor costs.

Juicer’s Kamlani noted that his platform’s dynamic pricing algorithm has helped restaurant clients see 5% to 10% increases in revenue and up to 35% widening of their margins.

“If you can match your labor and your raw materials with your pricing, potentially, you could actually operate more efficiently and maybe even reduce costs at some point in the future,” said Marc Emmer, president of strategic management consulting firm Optimize. “But there’s hypersensitivity right now because food inflation has been so high.”

But a 2023 survey from software marketplace Capterra found that 52% of consumers consider dynamic pricing at restaurants price gouging, with 36% ordering less often from establishments that adopt the model.

Of the 81% of consumers who frequently check menu prices before dining out, 51% have dropped restaurants entirely because of price increases. For these reasons, Capterra suggests restaurants tell customers exactly how and why prices will change—to improve food, pay employees, cover rising costs—and set narrow ranges for those price fluctuations.