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Wendy's Walks Back Surge Pricing Talk After Social Media Grilling

Wendy's restaurant surge pricing

Key Points

  • Wendy's stock rose nearly 2% on Feb 28 after the company said it would not be implementing surge pricing, clarifying earlier remarks from the CEO.
  • A social media backlash erupted over potential surge pricing, with Reddit users likening it to Uber's pricing model.
  • Analysts have a "hold" rating on Wendy's stock, with Wall Street eyeing a double-digit upside in the stock. 
  • 5 stocks we like better than Wendy's

Wendy’s Company NASDAQ: WEN stock traded nearly 2% higher on February 28 as the fast-food mid-cap said it would not raise prices at times of high demand. 

The turnaround came after Wendy’s CEO Kirk Tanner said, in the fourth-quarter earnings conference call, “Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and day-part offerings along with AI-enabled menu changes and suggestive selling.”

In other words, charging higher prices at busy times of day.

Frosty Reception for Surge Pricing

The news did not get a warm welcome on social media.

One Reddit post read, “Wendy's, like Ticketmaster, is planning to test "Dynamic Pricing" on their menu during busy periods in 2025. So arrive during a busy lunch or dinner rush? Expect ‘Surge Pricing’ on your food like it's Uber.”

Uber Technologies Inc. NYSE: UBER introduced surge pricing in 2012, charging higher prices for rides during busy times of day. 

New York City implemented a similar system in 2023, charging higher “congestion prices” at toll booths for cars and trucks entering the city during times of peak vehicle traffic. Movie theaters and airlines also use a version of surge pricing. 

Tanner made his remarks in the context of new technologies the company is rolling out.

“We are planning to invest approximately $20 million to roll out digital menu boards to all U.S. company-operated restaurants by the end of 2025 and approximately $10 million over the next two years to support digital menu board enhancements for the global system,” he said. 

Wendy's Driving "Immediate Benefits"

He added that Wendy’s expects the digital menu boards “will drive immediate benefits to order accuracy, improve crew experience and sales growth from upselling and consistent merchandising execution.”

Tanner’s remarks resulted in a #BoycottWendys hashtag on social media platform X. “If people don’t boycott Wendy’s and their surge pricing model it will lead to higher pricing at all restaurants moving forward.  It will change the restaurant industry for the worse and prices will never come down.  #BoycottWendys,” one X user wrote.


Wendy’s stock gapped down following its earnings report and is trading 3.81% lower on a one-month basis. It regained some ground in the past week, but that’s more likely due to value-oriented investors grabbing shares, rather than the market cheering the company’s about-face on surge pricing.

Wendy's Stock may be Overvalued

Wendy’s is tracked in the SPDR S&P MidCap 400 ETF Trust NYSEARCA: MDY. Although the stock has been beaten down in the past year, falling 12.57%, it still has a higher forward price-to-earnings ratio than its index.

Wendy’s 12-month forward P/E is 18.5, versus the midcap 400 index’s forward P/E of 15.2. That suggests that Wendy’s stock may be overvalued relative to the broader midcap market, indicating potential concerns about future earnings growth or market sentiment.

According to equity ratings from analysts at brokerage Charles Schwab, the market sentiment on Wendy’s is negative, with that outlook declining in the past week. 

Sentiment is a measure that incorporates news and significant events into a stock’s price, according to Schwab. Market sentiment views stock price changes through a lens of its wider history, earnings reports and performance relative to the market. It can be an indicator of future performance. 

Sales Growth Slowing

Wendy’s is much smaller than bigger fast-food rivals, notably McDonald’s Corp. NYSE: MCD, tracked among S&P 500 consumer discretionary stocks

While smaller companies can often post faster sales, earnings and price increases than larger counterparts, Wendy’s growth has been sluggish. In part, that’s because it’s a well-established company, not a newcomer, that’s increasing revenue at a fast pace.

Wendy’s year-over-year revenue and earnings growth have been decelerating in the past four quarters. Wall Street recently revised its earnings expectations lower for 2024 and 2025. 

The bottom line is: Tanner’s casual statement about surge pricing was likely just a bad move from a public relations standpoint, not something with a long-lasting effect that will drive revenue sharply lower.

Can Wendy's Breakfast Save the Day?

The company has already been struggling to get revenue growing again and is focusing on breakfast as a daypart likely to bring in more customers. 

Argus analyst John Staszak has a “buy” rating on the stock, saying, “We expect Wendy's to benefit from unit expansion, strong international growth, and investments in its digital business. We also expect its focus on breakfast menus to boost same-store sales.”

MarketBeat’s Wendy’s analyst forecasts show a consensus view of “hold” with a price target of $22.70, an upside of 23.04%. That’s a sign that Wall Street doesn’t view the stock as being in much of a pickle due to the surge pricing and social media kerfuffles. 

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Kate Stalter
About The Author

Kate Stalter

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Wendy's (WEN)
4.7568 of 5 stars
4.76 / 5 stars
$16.59-1.0%6.03%16.76Hold$21.03
Uber Technologies (UBER)
4.9246 of 5 stars
4.92 / 5 stars
$66.15-2.0%N/A106.69Moderate Buy$85.97
McDonald's (MCD)
4.7249 of 5 stars
4.72 / 5 stars
$253.37-0.3%2.64%21.51Moderate Buy$308.57
SPDR S&P MidCap 400 ETF Trust (MDY)N/A$547.57-1.9%1.10%15.70N/AN/A
Compare These Stocks  Add These Stocks to My Watchlist 


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