Some restaurants are already using surge pricing — and reaping big profits as Wendy's plans fluctuating charges

Published

1 year ago

February 28, 2024

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Dozens of restaurants nationwide have quietly begun using surge pricing and have reaped tens of thousands of dollars in profits from the controversial practice, The Post has learned.

Barbecue chain Tony Romas and nearly 100 other small restaurants have already turned to fluctuating menu prices during peak times — similar to the rollout planned by fast-food giant Wendy’s next year — according to one company that sells the software specializing in dynamic pricing.

Los Angeles-based Sauce Pricing — a startup backed by founding members of Sweetgreen, Uber, Airbnb and several private equity firms — said restaurants have the opportunity to increase item prices by 10% to 20% during the lunch rush so customers might pay an extra $1 to $2 for a $10 item, according to a blog post on its website.

In some cases, weve actually seen some restaurants go from having a 10% profit margin to a 20% profit margin, the blog post said.

One of its customers, Las Vegas-based casual eatery Rachels Kitchen, earned $64,000 in additional annual profit across three stores, according to Sauce Pricing’s website.

The Rachel’s Kitchen CEO Debbie Roxarzade confirmed the company uses Sauce Pricing’s software.

The prices “don’t increase or decrease [by] more than 15%, that’s our cap for all menu items,” she told The Post on Tuesday.

Orlando, Fla.-based Tony Roma’s, popular for its ribs, did not return calls for comment.

Ice cream favorite Carvel was also listed as a Sauce Pricing customer on its website, but the Fudgie the Whale maker denied any ties to the startup when contacted by The Post.

Sauce Pricing founder Colin Webb did not immediately return calls and emails for comment.

Uber-style surge pricing allows a business to hike up the cost of an item when a restaurant is slammed. Theoretically, restaurants can also lower prices during slower times, though it’s not clear whether Wendy’s will let favorites like Dave’s Single fall below its base price.

The announcement by Wendys chief executive Krik Tanner this month that the burger chain will invest in a “dynamic pricing” pilot sparked anger and anxiety from inflation-battered customers fed-up with ever increasing food prices.

Price gouging. The corporate food company go to, posted one angry user on X.

Most of the price adjustments, however, are on online orders and are meant to help restaurants cope with rising labor costs and delivery fees from Doordash, Grubhub and UberEats, Sauce Pricing’s website notes.

Delivery accounts for a growing portion of restaurant revenues and costs, particularly since the pandemic, experts told The Post.

One industry veteran pointed out that restaurants have long lowered and raised their prices to lure customers during slow and busy times.

Happy Hour is dynamic pricing and so is a burger that costs more at dinner than at lunch or an offer of free delivery during a thunderstorm, said Chris Webb, chief executive and founder of ChowNow, an online food ordering company.

But people like reliability and having prices change because the demand is higher is not hospitality.

Other experts said its just a matter of time before the restaurant industry catches up with industries like airlines and hotels that have mastered surge pricing.

Sometimes you check a flight and the price change within a week is dramatic, but it doesnt stop people from flying, said restaurant analyst Mark Kalinowski.

Ultimately, consumers will accept it if a large number of restaurant chains do it, too.

Business

UK economy contracts – with record fall in exports to the US after Trump tariff hikes

Published

1 hour ago

June 12, 2025

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UK economy contracts - with record fall in exports to the US after Trump tariff hikes

The UK economy shrank more than expected in April as the worst of President Trump’s tariffs hit.

The standard measure of economic output (GDP) contracted a sharp 0.3% in April, data from the Office for National Statistics (ONS) showed.

During the month, Mr Trump’s so-called “Liberation Day” applied steep tariffs to countries around the world and sparked a trade war with China, the world’s second-largest economy.

The outcome is worse than expected by economists. A contraction of just 0.1% had been forecast by economists polled by the Reuters news agency.

It’s also down from the growth of 0.2% recorded in March.

Blow for Reeves

It’s also bad news for Chancellor Rachel Reeves, who has made the push for economic growth her number one priority. Speaking to Sky News following the news, she described the figures as “disappointing”.

Additional costs on businesses were also levied during the month, as higher minimum wages and employer national insurance contributions took effect, which businesses told the ONS played a part in their performance.

Why?

The biggest part of the economy, the services sector, contracted by 0.4%, and manufacturing dropped 0.9%.

There was the largest ever monthly fall in goods exported to the United States, the ONS said.

Decreases were seen across most types of goods due to tariffs, it added.

Higher stamp duty depressed house buying and meant legal and real estate firms fared badly in the month.

After a strong showing in the first three months, car manufacturing performed poorly.

Politics

Economy shock overshadows Reeves’ big day

Published

1 hour ago

June 12, 2025

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Economy shock overshadows Reeves' big day

Sky News’ Sam Coates and Politico’s Anne McElvoy serve up their essential guide to the day in British politics.

Rachel Reeves has said this morning that the latest figures showing the UK economy has shrunk by more than expected are “disappointing”. How much will this overshadow yesterday’s major spending announcement?

The chancellor has now planted Labour’s fiscal flag in the sand – and spending mistakes from here on in certainly cannot be blamed on their predecessors. How will Labour react to a potential internal revolt over disability benefit cuts? And how will the party manage the politics around expected tax rises in the autumn?

Politics

Did ChatGPT get the spending review right? Treasury minister gives his verdict

Published

1 hour ago

June 12, 2025

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Did ChatGPT get the spending review right? Treasury minister gives his verdict

The chief secretary to the Treasury has called the Sky News-Chat GPT spending review projection “pretty good” and scored it 70%.

Darren Jones compared the real spending review, delivered by Rachel Reeves on Wednesday, and the Sky News AI (artificial intelligence) projection last week.

Sky News took the Treasury’s spring statement, past spending reviews, the ‘main estimates’ from the Treasury website, and the Institute for Fiscal Studies’ projections, and put them into ChatGPT, asking it to calculate the winners and losers in the spending review.

Politics Hub: Tap here for live updates

This was done 10 days ahead of the review – before several departments had agreed their budgets with the Treasury – on the basis of projections based on those public documents. It also comes amid a big debate kicked off by Sky News about the level of error of AI.

The Sky News-AI projection correctly put defence and health as the biggest winners, the Foreign Office as the biggest loser, and identified many departments would lose out in real terms overall.

It suggested the education budget would be smaller than it turned out, but correctly highlighted the challenges for departments like the Home Office and environment.

Watch what happened with Sky’s AI-generated spending review

Reviewing the exercise, the author of the real spending review told Sky News that this pioneering use of AI was “pretty, pretty good”.

He added: “I could be out of a job next time in 2027, which to be honest, it’s not a bad idea given the process I’ve just had to go through.”

The Treasury made a number of accounting changes to so-called “mega projects” which AI could not have anticipated, and changed some of the numbers.

Asked to give it a score, Mr Jones replied: “I’m going to give it 70%.”

The spending review includes AI as a tool to save money in various government processes.

Asked if 70% accuracy is good enough for government, he replied: “Well we’re not using your AI. We’ve got our own AI, which is called HMT GPT, and it helps us pull together all the information across government to be able to make better, evidence-informed decisions.”