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I worked in Wendy’s as a teenager. My first job. To this day I love the food. Having worked in the back I was very happy with the quality of the food. However,

I worked in Wendy’s as a teenager. My first job. To this day I love the food. Having worked in the back I was very happy with the quality of the food. However, I hate this idea. If they are using airlines as a model they are learning from the worst. I hope this fails hard for them and they go back to honest pricing.

lotsofpulp 3y ago
Why should people who want to buy during times when the food can be made for less money subsidize people who want to buy during times when the food costs more to make? Do you expect people to sell their labor for the same price, regardless if it is daytime, evening, weekend, overnight, or holidays? How would you incentivize people to mess up their bodies by going against the circadian rhythm or skip meals and weekend outings with their friends and families?
- handsclean 3y ago
  If it were a subsidy then Wendy’s would be closed during downtimes. If it were about wages then the plan would raise prices when wages increase overnight, not lower them. In general, prices are always about demand, not cost. People don’t cancel their weekend plans because Uber isn’t surging, they avoid or delay Uber when it is surging. It’s about spreading out the surge. Acting like the opposite is untenable is ridiculous, it’s the way the whole world works and has worked forever, except for one industry that gets away with everybody hating them because people have no alternative. It’s solely about increasing profits at the expense of customers, let’s not pretend anything else.
  - lotsofpulp 3y ago
    > If it were a subsidy then Wendy’s would be closed during downtimes. Which is what happens, many restaurants now close earlier, open later, close during the afternoon, or otherwise reduce hours. > In general, prices are always about demand, not cost. Prices are the intersection of supply and demand, with a lower limit being the cost of goods sold. > Acting like the opposite is untenable is ridiculous, it’s the way the whole world works and has worked forever, except for one industry that gets away with everybody hating them because people have no alternative. This is not true, spot pricing exists in many, many businesses. Obviously, the volatility of price changes is usually eaten by merchants at the retail stage in many businesses, but there is no need for it to always be the case. Many restaurants have "lunch menus" for this very reason. Even in theme parks, they effectively engage in a hybrid of spot prices by allowing people to pay extra to cut in line. > It’s solely about increasing profits at the expense of customers, let’s not pretend anything else. Yes, that is called business. No one accepts $20 per hour if they think they can get $30 per hour. Supply and demand curves are constantly in flux, regardless of how often Wendy’s changes the prices on its menu. The only question is how much utility the merchant thinks they will get from eating the cost of the volatility versus letting customers be exposed to it. A kitchen surely has a fixed limit to how much food it can serve up, so the supply has a cap, which a higher price can be obtained, which means the merchant can better compete with other businesses along other lines, such as investing in the facility, paying employees more, building more restaurants, etc. And obviously, the barrier to entry in the food business is extremely low, and the prices people are willing to pay are relatively low, so even if Wendy’s managed to extract a few extra percentage points of profit margin from more accurate pricing, it is not going to turn into a trillion dollar business.
    - handsclean 3y ago
      > Which is what happens, many restaurants now close earlier, open later, close during the afternoon, or otherwise reduce hours. And the hours that they remain open are not being subsidized, so your initial assertion that off peak customers are being subsidized was not true. > Yes, that is called business. Since you so accept acting purely in your own self interest, then surely you feel the same righteousness on behalf of customers responding inline with their own self interest, right? You continue to conflate this announcement of time of day pricing with just about every other influence on pricing, even those working in the opposite direction. Prices already change all the time, the new thing is just the surge pricing. There are many ways to deal with surges, from dynamic staffing to streamlined kitchens to additional locations to what’s presumably the current strategy, all of those plus sometimes making people wait. Wendy’s seems to believe surge pricing might sometimes be the most profitable option, whether that’s true depends entirely on specifics that we don’t have and customer response.
      - lotsofpulp 3y ago
        >And the hours that they remain open are not being subsidized, so your initial assertion that off peak customers are being subsidized was not true. Some off peak customers may be subsidized, for example those who want food at 2AM when volume is low and labor costs are high. Some off peak customers may not be, for example 2PM when the staff still needs to be there and have downtime. >Since you so accept acting purely in your own self interest, then surely you feel the same righteousness on behalf of customers responding inline with their own self interest, right? I cannot parse this statement. Everyone should do what is best for them, and try to avoid getting the short end of the stick. Obviously, the seller is going to try to sell to each individual at the highest price they are willing to pay, and the buyer is going to want to buy at the lowest price the seller is willing to accept. >You continue to conflate this announcement of time of day pricing with just about every other influence on pricing, even those working in the opposite direction. Prices already change all the time, the new thing is just the surge pricing. My point was that spot pricing can allow costs to be allocated more accurately to ensure the most efficient allocation of resources, including money to hire workers. >There are many ways to deal with surges, from dynamic staffing to streamlined kitchens to additional locations to what’s presumably the current strategy, all of those plus sometimes making people wait. I agree. >Wendy’s seems to believe surge pricing might sometimes be the most profitable option, whether that’s true depends entirely on specifics that we don’t have and customer response. Yes, it is certainly a gamble like every business decision. The pricing experiment could turn sufficient people off that it costs them more than it benefits them. The difference these days is that technology allows variable pricing to be implemented in a much more granular and economical way than in previous decades.
- neuralRiot 3y ago
  I never in my life have seen prices go down due to a new technology or method implemented. Did prices went down in stores who removed cashiers in favor of self-checkout? Or in McDonalds when the installed the kiosks? It just means more profits for the corp.
  - lotsofpulp 3y ago
    As you can see from multitude retail businesses filed with the SEC, the business' profit margins have not gone up, therefore the business's expenses must be rising. Maybe self checkout was worth it, maybe it was not, those details are up to the business' leaders, but any layman can see that profit margins are not rising to infinity for many (most?) businesses, so new technologies obviously do not simply result in increased profit margins for the business, and hence must be necessitated in order to keep the business competitive or offset other rising costs. Now, this might not apply to McDonalds, but McDonalds is also not in the restaurant business. https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/profit-margins https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/prof... McDonalds is in the real estate and branding business, which has much more scalability and higher barriers to entry, hence they are probably able to increase profit margins. The actual restaurant operators' (franchisees') profit margins, however, are probably not anywhere near as hot since they operate the non scalable and higher liability part of the business. But their financials are not public, so I cannot link you to them.

lotsofpulp 3y ago

Why should people who want to buy during times when the food can be made for less money subsidize people who want to buy during times when the food costs more to make? Do you expect people to sell their labor for the same price, regardless if it is daytime, evening, weekend, overnight, or holidays? How would you incentivize people to mess up their bodies by going against the circadian rhythm or skip meals and weekend outings with their friends and families?

handsclean 3y ago
If it were a subsidy then Wendy’s would be closed during downtimes. If it were about wages then the plan would raise prices when wages increase overnight, not lower them. In general, prices are always about demand, not cost. People don’t cancel their weekend plans because Uber isn’t surging, they avoid or delay Uber when it is surging. It’s about spreading out the surge. Acting like the opposite is untenable is ridiculous, it’s the way the whole world works and has worked forever, except for one industry that gets away with everybody hating them because people have no alternative. It’s solely about increasing profits at the expense of customers, let’s not pretend anything else.
- lotsofpulp 3y ago
  > If it were a subsidy then Wendy’s would be closed during downtimes. Which is what happens, many restaurants now close earlier, open later, close during the afternoon, or otherwise reduce hours. > In general, prices are always about demand, not cost. Prices are the intersection of supply and demand, with a lower limit being the cost of goods sold. > Acting like the opposite is untenable is ridiculous, it’s the way the whole world works and has worked forever, except for one industry that gets away with everybody hating them because people have no alternative. This is not true, spot pricing exists in many, many businesses. Obviously, the volatility of price changes is usually eaten by merchants at the retail stage in many businesses, but there is no need for it to always be the case. Many restaurants have "lunch menus" for this very reason. Even in theme parks, they effectively engage in a hybrid of spot prices by allowing people to pay extra to cut in line. > It’s solely about increasing profits at the expense of customers, let’s not pretend anything else. Yes, that is called business. No one accepts $20 per hour if they think they can get $30 per hour. Supply and demand curves are constantly in flux, regardless of how often Wendy’s changes the prices on its menu. The only question is how much utility the merchant thinks they will get from eating the cost of the volatility versus letting customers be exposed to it. A kitchen surely has a fixed limit to how much food it can serve up, so the supply has a cap, which a higher price can be obtained, which means the merchant can better compete with other businesses along other lines, such as investing in the facility, paying employees more, building more restaurants, etc. And obviously, the barrier to entry in the food business is extremely low, and the prices people are willing to pay are relatively low, so even if Wendy’s managed to extract a few extra percentage points of profit margin from more accurate pricing, it is not going to turn into a trillion dollar business.
  - handsclean 3y ago
    > Which is what happens, many restaurants now close earlier, open later, close during the afternoon, or otherwise reduce hours. And the hours that they remain open are not being subsidized, so your initial assertion that off peak customers are being subsidized was not true. > Yes, that is called business. Since you so accept acting purely in your own self interest, then surely you feel the same righteousness on behalf of customers responding inline with their own self interest, right? You continue to conflate this announcement of time of day pricing with just about every other influence on pricing, even those working in the opposite direction. Prices already change all the time, the new thing is just the surge pricing. There are many ways to deal with surges, from dynamic staffing to streamlined kitchens to additional locations to what’s presumably the current strategy, all of those plus sometimes making people wait. Wendy’s seems to believe surge pricing might sometimes be the most profitable option, whether that’s true depends entirely on specifics that we don’t have and customer response.
    - lotsofpulp 3y ago
      >And the hours that they remain open are not being subsidized, so your initial assertion that off peak customers are being subsidized was not true. Some off peak customers may be subsidized, for example those who want food at 2AM when volume is low and labor costs are high. Some off peak customers may not be, for example 2PM when the staff still needs to be there and have downtime. >Since you so accept acting purely in your own self interest, then surely you feel the same righteousness on behalf of customers responding inline with their own self interest, right? I cannot parse this statement. Everyone should do what is best for them, and try to avoid getting the short end of the stick. Obviously, the seller is going to try to sell to each individual at the highest price they are willing to pay, and the buyer is going to want to buy at the lowest price the seller is willing to accept. >You continue to conflate this announcement of time of day pricing with just about every other influence on pricing, even those working in the opposite direction. Prices already change all the time, the new thing is just the surge pricing. My point was that spot pricing can allow costs to be allocated more accurately to ensure the most efficient allocation of resources, including money to hire workers. >There are many ways to deal with surges, from dynamic staffing to streamlined kitchens to additional locations to what’s presumably the current strategy, all of those plus sometimes making people wait. I agree. >Wendy’s seems to believe surge pricing might sometimes be the most profitable option, whether that’s true depends entirely on specifics that we don’t have and customer response. Yes, it is certainly a gamble like every business decision. The pricing experiment could turn sufficient people off that it costs them more than it benefits them. The difference these days is that technology allows variable pricing to be implemented in a much more granular and economical way than in previous decades.
neuralRiot 3y ago
I never in my life have seen prices go down due to a new technology or method implemented. Did prices went down in stores who removed cashiers in favor of self-checkout? Or in McDonalds when the installed the kiosks? It just means more profits for the corp.
- lotsofpulp 3y ago
  As you can see from multitude retail businesses filed with the SEC, the business' profit margins have not gone up, therefore the business's expenses must be rising. Maybe self checkout was worth it, maybe it was not, those details are up to the business' leaders, but any layman can see that profit margins are not rising to infinity for many (most?) businesses, so new technologies obviously do not simply result in increased profit margins for the business, and hence must be necessitated in order to keep the business competitive or offset other rising costs. Now, this might not apply to McDonalds, but McDonalds is also not in the restaurant business. https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/profit-margins https://www.macrotrends.net/stocks/charts/MCD/mcdonalds/prof... McDonalds is in the real estate and branding business, which has much more scalability and higher barriers to entry, hence they are probably able to increase profit margins. The actual restaurant operators' (franchisees') profit margins, however, are probably not anywhere near as hot since they operate the non scalable and higher liability part of the business. But their financials are not public, so I cannot link you to them.