McDonald's is increasingly relying on an artificial intelligence "pricing engine" to recommend menu prices across the United States and some international markets, according to an investigation by Reuters. The system estimates what customers around each restaurant are willing to pay, and franchise owners say they face growing pressure to follow its recommendations.
How the Pricing Engine Works
According to Reuters, the machine-learning system analyses millions of transactions from nearly 14,000 US restaurants and recommends an "optimal price" for each menu item at each location. Screenshots reviewed by Reuters show the tool classifying restaurants by their sensitivity to price, assessing "customer willingness to pay in your area," and comparing nearby competitors' online menu prices. McDonald's has used some form of AI pricing tool since at least 2019.
The reporting describes pricing recommendations at the level of individual restaurants and local areas. It does not show McDonald's charging individual customers different prices based on who they are.
Prices That Vary by Location
A Reuters reporter in New York paid $7.17 for a Big Mac at one McDonald's and $8.05, about 11% more, at another restaurant two miles away owned by the same franchisee. Reuters said it could not establish that the AI engine caused that specific difference, as restaurant prices vary for many reasons. In 2023, the company's pricing tools recommended that a Connecticut franchisee charge around $18 for a Big Mac meal at a restaurant just off a state turnpike.
Franchisee Pressure
Five store owners told Reuters the company had pressured them to use its AI-supported pricing tools. Reuters reported that since January, franchisees have been asked to be "constructively engaging" with approved pricing tools, and that deviations from recommendations can be logged and raised in business reviews.
McDonald's Response
McDonald's told Reuters that its pricing portal is a tool rather than a mandate and that franchisees remain free to set their own final prices. The company said the engine supports its affordability strategy. The portal also reminds owners to comply with antitrust laws, since franchisees may compete with one another.
Sources
Reuters investigation, as reported by MarketScreener, Finimize and Rallies.