This week’s episode of Power to the Pricing People is an extra juicy one, so get ready to tuck in.
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Burgernomics
U.S Fast food chain Wendy’s hit the headlines following an announcement that it plans to test demand-based or dynamic pricing in 2025. The strategy, enabled by new digital menu boards that will let the company adjust prices based on consumer demand, drew major backlash, with critics equating it to Uber-like surge pricing.
Wendy’s quickly released a statement clarifying this new initiative was not about increasing prices by the minute based on a demand surge. Rather, it’s a more nuanced approach of adjusting prices higher or lower based on broader demand patterns and trends.
Seeing an opportunity to take a bite out of the competition, rival chain Burger King reacted by offering a free Whopper through their mobile app for anyone spending over $3.
Beefy prices
Thanks to The Economist’s infamous Big Mac Index, burger prices have long been a global economic indicator, so it’s no surprise that a $24 Five Guys receipt has gone viral and reignited debate about the cost of living. The receipt showed a bacon cheeseburger was sold for $12.49, along with a regular soda priced at $2.89. A small portion of fries was also added on – for a shocking $5.19.
Jerry Murrell, CEO of the premium burger brand, has previously talked openly about the company’s pricing strategy, stating that its prices are kept in line with its fluctuating costs. However, many unhappy customers took to social media platform X to express their upset over the prices.
While headline inflation has eased from its peak, food costs remain stubbornly high. In the US beef is up over 7% and steak prices have soared over 10% based on data from the latest consumer price index.
As volatile input costs continue to cause profitability challenges, it’s important to remember that pricing is your secret sauce. If you’re looking for the recipe to pricing success, get in touch today.
