YOUR MONEY Restaurant Roulette


Surge pricing is making it more expensive to eat out. Here’s how you can fight back. ::


BY GINA ROBERTS-GREY W


ith the festive season in full swing, who doesn’t love a happy hour, early bird


special, or late-night dining deal? Specials like these are common


and popular, for obvious reasons. But instead of making it cheaper


to eat out based on the time of day, a sneaky new trend is making it more expensive to do so. Called dynamic or surge pricing,


this is a practice where retailers vary the price of an item or service based on market conditions, such as the time of day, week, or year. This idea got a lot of attention


in February 2024 when the popular fast-food chain Wendy’s announced it would raise prices during its busiest times of the day. Wendy’s later walked back the


controversial pricing model, saying it was only trying out new menus at different times of the day with


the goal of making it easier to offer discounts and value meal deals. Which sounds a lot like dynamic


pricing. Surge pricing isn’t new. It has been


well-established in the travel and rideshare sectors, and its success has other businesses — especially those in the food and beverage industry — looking to cash in on higher potential profits during peak periods.


PRICES A MOVING TARGET In essence, surge pricing involves adjusting prices based on demand, allowing businesses to maximize their earnings during peak periods. So, a hotel near an NFL stadium


might charge two to three times more than its normal rates for a stay on the weekend of a home game. And now, restaurants near a


stadium are hoping to get a similar profit boost by increasing their prices and/or automatically tacking on extra charges on days — or sometimes entire weekends — of a sporting event. But it isn’t just about boosting


Surge pricing helps merchants maintain a balanced workload during those busy times, ensuring there’s enough resources to go around and keep everything running


smoothly.” — Josh Peters, CEO and


president of MCS Capital 80 NEWSMAX MAXLIFE | DECEMBER 2024


the bottom line. “The higher prices aren’t just random. It’s a mix of economic stuff, including when things get more expensive [for the businesses],” says business management consultant Josh Peters, CEO and president of MCS Capital in Indianapolis, Indiana. “It hits national chains and your


local hangout, too — in the wallet. To keep making money, they resort to surge pricing.” Labor factors, such as needing to


hire more staff to cover the influx of patrons at a sports bar during a big game, are a driving force of surge pricing, too. “When more people than usual


head to the bar or grab a bite at the same time, it puts a strain on everything, from staff to supplies,” Peters says. “Surge pricing helps merchants


maintain a balanced workload during those busy times, ensuring there’s enough resources to go around and keep everything running smoothly.” But surge pricing is headed to


restaurants and other retailers for occasions less obvious than holidays and major events. Merchants are considering (and


some are starting to implement) raising prices for food, drink, and services, and more during prime times — similar to the model Wendy’s tried but failed to execute. Even Amazon has entered the


surge pricing game, changing the price of items not only by the day or season, but by the time of day in many instances, based on customer interest.


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