Fast food giant Wendys Co (NASDAQ:WEN) caused quite a stir online and on social media with reports that the company would offer dynamic pricing and potentially raise prices during periods of high demand.

The company is now walking back its original comments.

What Happened: The restaurant company recently reported fourth-quarter financial results, which also included comments from new CEO Kirk Tanner on digital business initiatives such as new menu boards.

"Beginning as early as 2025, we will begin testing more enhanced features like dynamic pricing and daypart offerings, along with AI-enabled menu changes and suggestive selling," Tanner said during the earnings call.

The mention of dynamic pricing led to many suggesting that Wendy's would raise prices during periods of high demand, which is similar to surge pricing used by ride-share companies like Uber and Lyft.

"To clarify, Wendy's will not implement surge pricing, which is the practice of raising prices when demand is highest," company spokesperson Heidi Schauer told The New York Post. "We didn't use that phrase, nor do we plan to implement that practice."

Schauer said there are no plans to raise prices "when our customers are visiting us most."

"Dynamic pricing can allow Wendy's to be competitive and flexible with pricing, motivate customers to visit and provide them with the food they love at a great value."

The company issued a statement saying the initiative is the digital menu boards, which will provide flexibility for restaurants with no plans to raise prices.

"Wendy's has always been about providing high-quality food at a great value, and customers can continue to expect that from our brand," the company said.

Related Link: Frosty Outlook For Wendy’s: Underwhelming Q4 Results Amid Rising Digital Sales And Global Expansion

Why It's Important: The backpedaling by Wendy's comes after many media outlets including the New York Post ran with the dynamic pricing comment meaning an increase in prices during peak periods.

Criticism for the chain ran rampant on social media and many people said they would stop going to Wendy's. Among the people who criticized the news was Sen. Elizabeth Warren (D-Mass.).

"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 going plain and simple, and American families have had enough," Warren said.

The tweet from Warren has since received a Community Notes clarification on it with Wendy's updated statement linked.

The media outlet reached out to Wendy's questioning if burger prices would go up during lunch and dinner hours and did not receive a direct answer.

"We will test a number of features that we think will provide an enhanced customer and crew experience," the company said. "We don't have any additional information to share at this time."  

Here are the Oxford language definitions for surge pricing and dynamic pricing found on Google.

Surge Pricing: "The practice of charging more for a product or service during periods when it is in high demand."

Dynamic Pricing: "The practice of varying the price for a product or service to reflect changing market conditions, in particular the charging of a higher price at a time of greater demand."

The definitions are quite similar in fashion with the exception of dynamic pricing not always coming as an increase.

Tanner's comments about dynamic pricing said the new digital menu boards "should increase further supporting sales and profit growth" for the company. With discount prices on the digital boards, it would take more frequent visits from customers to lead to increased sales and profits.

WEN Price Action: Wendy's shares were down 0.49% to $18.11 on Thursday at market close versus a 52-week trading range of $17.64 to $23.90.

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