Sen. Casey questions Wendy’s intent with dynamic pricing plans

Fast-food giant Wendy’s has come under fire this week for its plan to implement dynamic pricing at its restaurants. Now the move is drawing concerns from Pennsylvania politicians.

U.S. Sen. Bob Casey, D-Scranton, sent a letter to Wendy’s CEO on Wednesday raising issues about their plans for dynamic — or surge — pricing and said that Pennsylvania families deserve pricing consistency from the fast-food chain.

“For families that frequent Wendy’s for a quick breakfast, lunch, or dinner, changing their schedules to get to Wendy’s when prices are low is not an option — working parents have to abide by work, school, and other limiting factors,” wrote Casey in his letter to Wendy’s CEO Kirk Tanner.

The Pittsburgh area is home to about 60 Wendy’s locations, according to the company’s website. Pennsylvania is home to the seventh most Wendy’s locations of any state with 259 locations.

News of Wendy’s intent to introduce dynamic pricing came Monday, but company officials sought to clarify their plans the next day saying Wendy’s had “no plans” to raise prices at high-demand times.

“To clarify, Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. We didn’t use that phrase, nor do we plan to implement that practice,” a Wendy’s spokesperson said in a statement on Tuesday.

The Ohio-based company will test digital menu boards starting in 2025, that will utilize dynamic pricing and artificial intelligence-enabled menu changes and “suggestive selling based on factors such as weather.”

Wendy’s further elaborated to CNN on Wednesday, saying the company never planned to raise prices during demand surges, and that assumptions the company was backpedaling on surge pricing plans were false.

Regardless, Casey said he had concerns about Wendy’s raising prices during high-demand times and questioned how dynamic pricing won’t increase prices and still lead to increased profits, a goal Wendy’s officials stated in an earlier earnings call.

“Dynamic pricing is responsive to surges in demand, meaning that when demand is high, prices will increase — a model that can resemble price gouging,” Casey wrote in his letter. “Students may be charged more after their classes let out, churchgoers after services on midday Sunday, and workers will have to pay more when their shift is over. Surge pricing may lead to prices changing during the time a customer waits in line, including in a crowded drive-thru lane.”

Casey is seeking answers to several questions about how AI technology will be used for dynamic pricing and assurances Wendy’s will not raise prices during high-demand periods. He is requesting responses from Wendy’s by March 27.

His letter comes as the Democratic senator has been making a push against allegations of corporate pricing initiatives across the nation as costs have risen due to inflation.

Casey introduced a bill Wednesday that opposes so-called “shrinkflation,” or the practice of shrinking everyday consumer goods such as cereal, potato chips, laundry detergent and toilet paper, without lowering the price.

In November, the senator released a report about alleged “greedflation,” which accuses large corporations of using inflation as cover to raise prices and rake in record profits.

Corporations have denied such allegations, and some economists have said so-called greedflation ignores basic principles of economics and supply-chain problems caused by the pandemic.