Wendy's Leverages Palantir's AI to Optimize Supply Chain and Boost Promotions

Wendy's Bets on Palantir AI to Keep Up With $1 Frosty Demand

Wendy's Co. is leaning on cheeky promotions and a flurry of deals to woo customers from much bigger competitors like McDonald's Corp. One weapon in its arsenal: Palantir Technologies Inc. The data analytics firm, which built its reputation serving defense-focused clients, has been putting its massive computing ability to work for corporate America. For Wendy's supply-chain group, Palantir is able to use artificial intelligence to spot shortages before they happen to make sure that, if a $1 Frosty promotion leads to droves of consumers, the fast-food chain is ready to serve them.

Wendy's needs AI to handle its $1 Frosty demand

Wendy's is taking a shot at McDonald's broken McFlurry machines with a $1 Frosty deal "Leveraging our Frosty has been a game changer," Wendy's CEO Kirk Tanner said during the company's earnings call on Oct. 31. Wendy's revealed that this AI system helped power its recent $1 Frosty promotion, which took aim at competitors' unreliable ice cream machines. Instead of stocking up on extra inventory, which can be expensive, Wendy's says it's deploying Palantir's AI-powered system to predict potential shortages. This way, stores can be ready when droves of customers stop by to grab their sweet fix. After testing the system in fall 2023, Wendy's found it was "so much better" than the old methods. It isn't Wendy's first AI experiment. In Dec. 2023, the chain expanded its FreshAI chatbot to assist employees working the drive thrus. It insisted it was "not a replacement," but rather a tool to help improve efficiency. Initial test results are promising, with plans to implement the tool at more locations across the U.S. in 2025, executives said on the earnings call. Taco Bell (YUM+2.15%) is also embracing AI and has rolled out a voice assistant at drive-thrus in 13 U.S. states. As the restaurant industry faces rising costs and higher consumer expectations, these tech innovations are quickly becoming essential for staying competitive. Wendy's did not immediately respond to Quartz's request for comment on whether AI-driven supply chain improvements could lead to job cuts. Of course, it's not just about supply chain efficiency. Wendy's has been capturing the attention (and wallets) of customers with quirky, limited-time promotions like its SpongeBob KrappyPatty burger and Pineapple Under the Sea Frosty. These "food gimmicks" helped drive sales during the third quarter, alongside deals like the $3 breakfast bundle and $5 Biggie Bag. In the coming weeks, Wendy's plans to add a new salted caramel frosty flavor. In just a few years, fast-food chains that don't adopt AI could find themselves at a serious disadvantage, according to Wendy's supply chain co-op. The independent group, which buys goods and supplies on behalf of the franchisees, is banking on Palantir's system to optimize operations and keep pace with the competition.

Wendy's Uses Palantir AI Tech To Manage Burger, French Fry Inventories; Return On Investment Is 'Significant' - Wendy's (NASDAQ:WEN)

Eventually, the AI model will manage smaller inventory, ordering tasks autonomously and without human intervention. Wendy's Co. WEN is using artificial intelligence from data analytics firm Palantir Technologies, Inc. PLTR to manage its supply of burgers, fries and Frosty's. The Details: Wendy's supply chain purchases are handled by an independent co-op group that first tested Palantir's technology last year amid tight profit margins and increasing pressure from inflation, according to a Bloomberg report. The group is using Palantir's system to spot shortages and suggest solutions like placing an order from a supplier. Read Next: What Does Trump's Victory Mean For EV Giant Tesla And The Big 3 Automakers? Pete Suerken, who leads the purchasing co-op, said the system's AI learns over time and can suggest a specific warehouse, after considering factors such as cost and the probability of the items arriving on time. The software can predict when specific products will run out by analyzing current and historical sales figures. Suerken praised Palantir's platform and said it was "so much better" than spreadsheets and other customary inventory management methods. He also said the return on investment is "significant." Wendy's recently asked the supply chain program to identify shortages restaurants could face over the following three weeks and then staff trained the model by showing how the shortages should be solved. Wendy's purchasing group plans to eventually allow the AI model to manage smaller inventory and ordering tasks autonomously and without human intervention. "Three or four years from now, if you're not doing this, you'll be at a distinct disadvantage," said Suerken. "This is something that, as an industry, will change the way we work." WEN, PLTR Price Action: According to data from Benzinga Pro, Wendy's shares are down 1.54% at $20.08 and Palantir shares are down 2.13% at $54.32 at the time of publication Thursday. Read Also: Dollar General Aims To Draw Customers From Walmart, Amazon With Holiday Sales Events Photo: Shutterstock Market News and Data brought to you by Benzinga APIs