Dynamic Pricing in Fast Food: Profit-Driver or Diner Turnoff?

Faced with rising labor costs and increasingly price-sensitive customers, restaurant brands are exploring new ways to balance profitability with consumer expectations. One of the most debated strategies is dynamic pricing, which adjusts based on demand and other variables.

Although dynamic pricing is a staple in industries like travel and hospitality, its application in fast food is uncharted territory. Recent experiments with pricing strategies, such as summer value promotions, yielded lukewarm results, leaving operators questioning the best approach to menu pricing. 

To illuminate the topic, Revenue Management Solutions leveraged its proprietary eye-tracking technology and decades of menu engineering expertise to understand consumer reactions. The findings reveal critical insights into how dynamic pricing impacts customer behavior and what strategies might retain loyalty in a competitive market.

The Psychology of PricingRMS conducted a behavioral study using eye-tracking…