McDonald's is deploying an AI pricing engine across the United States
Description: The cost of your next fast-food meal might depend entirely on what a machine-learning algorithm thinks your neighborhood is willing to pay.
According to a recent Reuters report, McDonald's is deploying an AI pricing engine across the United States and select global markets to recommend optimal costs for individual restaurants. By analyzing millions of daily transactions, the system assesses consumer price sensitivity to determine the ideal charge for menu items. This dynamic pricing strategy has led to noticeable local discrepancies, including a Big Mac costing 21 percent more than at another company-run location just two miles away.
While the corporation describes the technology as an optional tool designed to maximize profitability, multiple franchisees report feeling pressured to implement the algorithm's suggestions. Observers note that while this approach may boost revenue, it risks alienating regular customers and attracting antitrust scrutiny.
Would you continue visiting a franchise if you knew an algorithm was actively adjusting the prices in your area?
Media: Reuters Close description
According to a recent Reuters report, McDonald's is deploying an AI pricing engine across the United States and select global markets to recommend optimal costs for individual restaurants. By analyzing millions of daily transactions, the system assesses consumer price sensitivity to determine the ideal charge for menu items. This dynamic pricing strategy has led to noticeable local discrepancies, including a Big Mac costing 21 percent more than at another company-run location just two miles away.
While the corporation describes the technology as an optional tool designed to maximize profitability, multiple franchisees report feeling pressured to implement the algorithm's suggestions. Observers note that while this approach may boost revenue, it risks alienating regular customers and attracting antitrust scrutiny.
Would you continue visiting a franchise if you knew an algorithm was actively adjusting the prices in your area?
Media: Reuters Close description
