Good morning. About four decades ago, Wendy’s debuted its “Where’s the beef?” slogan, which recently has been updated to something closer to “Where’s the beef but also what time is it?” It’s not as catchy.
Shortly after the burger chain’s CEO said his restaurants would embrace “dynamic pricing”—as covered by my colleague María Soledad Davila Calero—Wendy’s backtracked to say that any comparisons to companies like Uber weren’t entirely fair.
This clarification game after a deluge of criticism that included everyone from peers to Sen. Elizabeth Warren (D-Mass.), who wrote in an X post on Wednesday morning:
“Wendy’s is planning to try out ‘surge pricing’—that means you could pay more for your lunch, even if the cost to Wendy’s stays exactly the same. It’s price gouging plain and simple, and American families have had enough.”
So I reached out to Wendy’s, which is aiming for $2 billion in global digital sales by the end of the year, to get the full story. A spokesperson sent me a statement that included: “Wendy’s will not implement surge pricing, which is the practice of raising prices when demand is highest. We didn’t use that phrase, nor do we plan to implement that practice.”
CEO Kirk Tanner had said on the company’s Q4 earnings call that, beginning as soon as next year, “we will begin testing more enhanced features like dynamic pricing and day-part offerings along with AI-enabled menu changes and suggestive selling.”
And on Wednesday morning, the company posted on its blog that “digital menu boards could allow us to change the menu offerings at different times of day and offer discounts and value offers to our customers more easily, particularly in the slower times of day.”
So items will cost different prices at different times. Even when framed as “discounts,” it’s a process surrounded by land mines. If implemented poorly, according to McKinsey, even having access to the best advanced analytical tools to help tailor prices isn’t enough: “The common mistakes that retailers make include the following: introducing prices that alienate customers, changing prices too frequently, and relying on bad data.”
More from McKinsey on dynamic pricing: Businesses should “establish and enforce strict pricing guardrails. Your prices shouldn’t fluctuate so dramatically that they confuse and alienate customers. If customers perceive price changes as random, unfair, or disconnected from your value proposition, they’ll simply shop elsewhere.”
And this all comes as many consumers are already expressing frustration with static fast-food prices, including $18 Big Mac meals, a concerning trend explored in greater detail by another of my Fortune colleagues, Sasha Rogelberg.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Charlotte Hanneman was appointed as CFO for the health care tech company Philips (NYSE: PHG). Hanneman will assume the role officially on Oct. 1 but will join Philips' executive committee on June 1, for a transitional period with outgoing CFO Abhijit Bhattacharya, who is set to retire by the end of September. Hanneman has 20 years of experience in the medtech industry, previously working as controller and head of financial planning and analysis at Stryker.
Juan Joachin was appointed CFO at National DCP, a supply chain management company serving Dunkin' franchisees. The previous CFO, Stephen Down, was promoted to CEO on Dec. 20, 2023. Joachin has worked for years at the intersection of food and finance, most recently as senior vice president of finance at Inspire Brands. Before joining Inspire, Joachin was the SVP of finance operations at Domino's Pizza.
Big deal
Post-pandemic engagement trends vary widely across age generations, according to a new Gallup report. Younger employees feel the most detached from their work and employers, meanwhile, baby boomers remain engaged.
The most significant decline in engagement has occurred among older millennials (born between 1980 and 1988). The percentage of engaged older millennials has declined by seven points, from 39% in 2020 to 32% in 2023. The younger group of millennial and Gen Z employees (born 1989 or later) have experienced a five-point decline in engagement, from 40% to 35%.
"These findings suggest that younger workers progressively feel more detached from their organizations and managers and are less likely to see a future for themselves in their current roles," according to Gallup. The report also offers best practices on how to inspire and keep younger workers.
Going deeper
In the latest episode of Fortune's Leadership Next podcast, Exxon Mobil CEO Darren Woods discussed with co-hosts Fortune CEO Alan Murray and editor-at-Large Michal Lev-Ram the reasons he believes net zero emissions isn’t happening any time soon, ExxonMobil’s company culture, and why he never brings work home with him.
Overheard
“If this kind of campaign results in moving a company like Starbucks, I think a lot of workers are going to say, ‘You know what, I think we can move my company, too.’”
—Sharon Block, executive director of the Center for Labor and a Just Economy at Harvard Law School, told Fortune about Starbucks' new commitment to work with its main union. Most recently, Starbucks announced that it would allow credit card tipping for union stores and that it would accept collective negotiations as opposed to store by store.
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