McDonald's Reportedly Using AI to 'Dynamically' Price Its Burgers (engadget.com)
- Reference: 0185899576
- News link: https://tech.slashdot.org/story/26/09/29/1815221/mcdonalds-reportedly-using-ai-to-dynamically-price-its-burgers
- Source link: https://www.engadget.com/2272211/mcdonalds-is-reportedly-using-ai-to-dynamically-price-its-burgers/
> Reuters got a look at the interface that franchisees use to access this technology and it's pretty creepy. Messages show stuff like "your restaurant is showing MEDIUM SENSITIVITY to price" based on "customer willingness to pay in your area." Cost differences at nearby locations can be stark. Researchers found that a Bic Mac at a Fresno, California store cost $5.69, but the same burger cost $6.89 at another branch two miles down the road. That's a 21 percent difference.
>
> The company acknowledges that using this dynamic pricing system could open up franchisees to legal hurdles, all while continuing to push the platform. The pricing portal's terms of service reportedly warns that owners "may be competitors of each other" and "it is particularly important for all Users of the Tool to understand and comply fully with antitrust and competition laws." The document also reiterates that franchisees are "always free to determine the final price," thus potentially absolving corporate from any antitrust concerns.
>
> McDonald's has decried Reuters' reporting as "speculative and uninformed." The company says the pricing portal is "a tool, not a mandate, designed to provide restaurant-specific recommendations to help franchisees deliver value for customers and make informed business decisions." The company has been using some version of this technology since at least 2019, according to Reuters. In 2023, however, CEO Kempczinski [3]boasted to investors that it had developed proprietary tools to evaluate pricing at individual restaurants.
[1] https://www.engadget.com/2272211/mcdonalds-is-reportedly-using-ai-to-dynamically-price-its-burgers/
[2] https://www.reuters.com/business/inside-mcdonalds-push-have-ai-price-your-big-mac-2026-09-29/
[3] https://corporate.mcdonalds.com/corpmcd/our-stories/article/investor-update-2023.html
Nothing changes (Score:5, Informative)
Just another reasons not to eat McDonald's, not that I needed one.
Re: (Score:2)
Ditto. Sounds like I'll just need to dynamically avoid their restaurants...
Re: (Score:2, Interesting)
Honestly, I'm scared of eating any chicken or beef based foods from McDonalds (or Burger King or Wendy's) at this point. I've had issues with "chicken" nuggets as well as "burgers" being made of something I would not consider the appropriate type of meat.
Fish sandwiches are still okay, for now, since they have trouble replicating the texture. But I avoid them anyway. I don't want to get a bad fish sandwich.
French fries are fine. I know they are coated to stay crispy longer, but at least the texture and
Re: Nothing changes (Score:2)
All fish sandwiches made with a patty are bad. If you go look up how they are made you will never eat a fish patty or stick again.
Re: (Score:1)
YOU'RE not allowed to eat meat.
The rest of us can.
You get bugs instead.
Re:Don't eat this crap (Score:5, Funny)
> They're a horrible company and nobody should be eating meat anyhow.
Let me know when McDonald's starts serving meat.
I'd figure out how to manipulate it... (Score:2)
...if I was willing to eat anything produced by McDonalds.
Translation (Score:2)
> ... a tool, not a mandate, designed to provide restaurant-specific recommendations to help franchisees deliver value for customers and make informed business decisions
... a suggestion which owners would do well to follow if they want continued support from Corporate, designed to help franchisees suck every possible penny from customers while engaging in rapacious business practices ...
McDonald's is a vampiric real estate business with a synergistic side-hustle slinging burgers and promoting malnourishment and diabetes. May they rot in hell.
Dumb and McDumber moves. (Score:2)
> based on what customers near individual restaurants are willing to pay..
I suppose this pricing comparison is only between McVendors, since they don't even make the same product as the restaurant next door. (The Mom and Pop restaurant down the street from McDonalds isn't a multi-billion dollar conglomerate selling custom designed addiction in a food wrapper.)
Lame to blame this on AI, but I doubt enough customers are going to tolerate some Zillow-grade pricing scam for McShittles sprinkled with food crack. A Big Mac for almost $7? I guess the measurable decline in sales based
Re: (Score:2)
Maybe that's actually a measure of how bad the inflation is.
So what? (Score:2)
Why is this a problem? A guy could be selling watermelons out of the back of his truck for $5, another one a few streets over is selling them for $4, and no one bats an eye. A massive, franchised restaurant does the same thing, and everyone loses their minds.
... Wendy's is better anyway. And they have the best nuggets.
Re: (Score:3)
> Why is this a problem? A guy could be selling watermelons out of the back of his truck for $5, another one a few streets over is selling them for $4, and no one bats an eye.
Because it is price-fixing via an app.
You are correct that the way it is supposed to work is that competing businesses compete by offering differing prices for their products or services, then customers are free to choose the price they are willing to pay. But this ain't that.
This is McDonald's (and soon every other restaurant) conspiring together to set the price as high as they want so every restaurant everywhere has the same high price - customers are no longer free to choose because all prices are th
Re: (Score:2)
Correct.. the concept is as old as time..
But the scale and collusion factors are the main issues with this.. This will not be a race to the bottom where the consumer gets the benefit.. this will be a race to the top where the consumer suffers the most.
Re: (Score:2)
Thank you. Watermelon Man and AI based price-fixing and collusion are not the same things. This is gouging, surge pricing, price fixing - things MBA's learned were bad in school but somehow became next quarter's growth, because marketing found a way to spin it as fun and exciting.
Sleezy stuff, but not price fixing (Score:1)
> Because it is price-fixing via an app.
I think price fixing requires collusion between competitors. It will be hard to argue that franchisees of the same restaurant are competitors. Plus the franchisor could argue that this is price discovery. determining the customer willingness to pay. That the two Fresno restaurants with different prices is an A/B test.
> so every restaurant everywhere has the same high price
It doesn't sound like they are doing that, that they are trying to discover local willingness to pay to maximize profits. Consider those two Fresno restaurants, I expect one is downtown and one
Re: Sleezy stuff, but not price fixing (Score:2)
It says the prices will be adjusted to what consumers will pay in other nearby restaurants. Isn't that the very definition of collusion?
Re: (Score:2)
It's just fear porn.
```
McDonald's tracks adherence to the platform, and notes any deviations from the algorithm's price recommendations
```
Which is what you'd want to do for any prototype system.
They should then track foot traffic, gross sales, and net profit and see whether the recommendations increased or decreased them when followed.
Having a control group is valuable, not a target for punishment. If McD Corporate were sane, anyway (cf. ice cream machine fiasco).
The one near me was charging over $6 for fr
late capitalism (Score:2)
If this pisses you off you can choose not to go to there OR you can choose another economic system - or at least *threaten* to choose one, the one that absolutely scares them the most: The Future Has to Be Made: A Masterclass On Marxism, Anarchism, and Revolution w/ Garrett Halas [1]https://www.youtube.com/watch?... [youtube.com]
This video answers all the most common objections to Marxism, e.g. doesn't it always fail?
[1] https://www.youtube.com/watch?v=ttut9J6_Hs0
Real life different than ivory tower (Score:1)
> If this pisses you off you can choose not to go to there OR you can choose another economic system
Given the real world long lines and mostly empty shelves that real world Marxism produces, you might want to fund a different topic for the marxist propaganda.
"Yeltsin's entourage made an unexpected stop at a Randalls grocery store to see what the average American shopping experience was like. Multiple commentators have noted that the grocery store visit had a major impact on Yeltsin's political views, with an aide who had been present with him during the trip saying that "the last vestige of Bolshevism
homeless shopping network (Score:2)
The homeless shopping network is here for you.
Our homeless shoppers get a printed list of what you need and carry no electronics at all. Our homeless shoppers never trigger price premiums and are available to shop when dynamic prices are lowest - reheating now available for an extra fee. Save today with the homeless shopping network!
I can't wait (Score:3)
How long will it be before there's a phone app which allows people to take pictures of the menu boards at McD's and have the geo-located data posted in real time? In a region where the density of McDonald's locations is high, such an app might make following Head Office's dynamic pricing suggestions counter-productive for franchisees.
I can also see this becoming a zero-sum war among LLMs. Zero-sum, that is, only if you ignore the societal and environmental cost of data centres churning bits.
Call me old fashioned if you must; I still say that spending all that new compute just to end up with pretty much the old pricing is a tad irresponsible, anti-social, and self-defeating. In other words, it's very corporate and very Capitalistic.
Well sometimes be cheeky (Score:2)
Well sometimes be cheeky. I fire up the mcdonalds app some days, then drive with the gps on to Wendys and leave it on while it sit there and eat. I continue to leave it on while driving back to work then I shut it off in the parking lot.
Feels better knowing they are watching. Ever since they ratted on Luigi I have been penalizing them.
Value? (Score:2)
"help franchisees deliver value for customers ". Please explain sir, just what "value" does the customer receive by being charged extra? Sheesh.
More corporate-speak BS.
F that nonsense... (Score:2)
I want to share my little perspective. I worked at a McDonalds about 26 years ago. For several years while in high school and a bit in college. It was near the Interstate, in Mitchell South Dakota. This means we were quite busy, quite a bit of the time. If a bus came through, and they certainly did, one of if not the most likely place it would stop is there. We were paid near eight dollars an hour which inflation adjusted is probably the same now. As a high schooler, we worked pretty hard. There were two or
So? (Score:2)
They were doing dynamic pricing already. Now they are using another tool to do it. So?
If they were doing this for the first time it would be news, but "company does automated thing with different automation" isn't.
Fresno example sounds like basic A/B testing (Score:1)
> They were doing dynamic pricing already. Now they are using another tool to do it. So?
The Fresno example sounds like basic A/B testing
Surge pricing (Score:2)
"Sorry, due a temporary surge in demand we are unable to find a burger for you at this time. Please try again later."
This is just standard market based pricing (Score:1)
Just because a company is a chain or franchise doesn't mean the prices will always be the same. I pay more for food behind security in an airport than I do 2 miles away down the road. Pricing may be based on location and real estate pricing, local amenities, ocean view, or just being in a rich neighborhood.
This have really nothing to do with LLM or modern GenAI. It would be nice is the prices were somewhat stable (eg. not changing through the day like gas), but we should not be the same. Traditionally p
What is the need for "AI" in this ? (Score:2)
Price comparison has been going on for years; just send someone round to nearby stores with a pen & clipboard; collate the results and set prices.
"AI" is just the latest type of magic pixie dust that is used to wow people that something great is going on.
McDonalds sells to business owners (Score:2)
> ... may be competitors ...
It's normal for franchisers to offer a monopoly: This would be McDonalds breaching their own contract. The most likely outcome is one restaurant cannibalizes another restaurant, with total sales remaining constant. The biggest consequence would be franchisees suing McDonalds for lost sales. It's important to remember McDonalds really sells to small business owners, and here, McDonalds plans to piss on their customers.
Price trackers (Score:4, Interesting)
Does this mean we should watch for price trackers online like we do for gas?
Re: (Score:2)
If your time is worth the savings then why not? I have a feeling the prices reflect the general desirability of the neighborhood the McDonald's is located in so I doubt too many people are going to drive a few extra miles (particularly with gas being expensive) to save a dollar or two on a burger when they realize it means driving through the bad part of town.
The better question is if this will lead to an arbitrage market for burgers. You need not venture to the wrong side of the tacks when a brave Uber
Re: (Score:2)
Is it just me?
I can't think of a single McD's item that I would be willing to pay $5 or more for.....?
Re: (Score:2)
I remember when an entire Big Mac Extra Value Meal was $4.99 :-(
I would think dynamic pricing would be super-obvious to the customer unless they are limiting it to specific price points. Market-based pricing has been a thing for a long time for other products. I already suspect it's used in retail even in my own town when I can go to Wal-Mart on one end of town and find deals different than the one on the other side of town. This just means the end of nation-wide ad campaigns for Mc.D's I guess.