McDonald’s Uses AI for Dynamic Pricing

McDonald's algorithms analyze millions of purchases across nearly 14,000 U.S. restaurants to determine food prices. The system integrates competitor pricing data, including from Wendy’s and Burger King, as well as local purchasing power.

The system evaluates customer price sensitivity and can directly report this metric to franchise owners. Reuters journalists discovered significant price differences for the same Big Mac: in Fresno, it cost $5.69 and $6.89 at locations just 2 km apart, a 21% difference.

Conflict between corporation and franchisees

McDonald’s denies allegations of manipulation, stating that outlet owners independently set pricing policies. However, five interviewed network owners reported pressure from the company regarding menu prices. AI tools have been used in fast food since 2019.

Dynamic pricing and accessibility

In recent months, the algorithm has occasionally recommended lowering prices to attract budget-conscious customers. This creates a situation where buyers must visit disadvantaged neighborhoods to get cheap burgers. Source links: Reuters.