McDonald’s is increasingly using AI to recommend menu prices in the U.S. and some global markets, analyzing millions of daily transactions to estimate what customers at each location are willing to pay, according to a Reuters investigation published today.
The machine-learning system proposes what McDonald’s calls an “optimal price” for individual products at each restaurant. It considers transaction history, local demand and publicly available menu prices from nearby competitors, Reuters reported after reviewing screenshots, company documents and interviews with nine people familiar with the strategy.
McDonald’s said franchisees retain final control over their prices and described the system as a decision-support tool rather than a mandate.
Five franchise owners told Reuters, however, that the company pressured them to follow its recommendations. McDonald’s began requiring franchisees in January to engage constructively with approved pricing consultants and tools as part of its business standards.
The recommendations can differ between nearby restaurants. Reuters found that two company-operated locations two miles apart in Fresno, Calif., charged $5.69 and $6.89 for the same Big Mac – a 21% difference. Reuters could not determine whether the AI system caused that disparity.
McDonald’s has used some form of AI pricing since at least 2019. During the pandemic, some franchisees said the system recommended substantial increases. More recently, it has proposed more conservative prices and some reductions as the company tries to attract value-conscious customers.
The approach could draw regulatory attention because algorithmic pricing systems are being scrutinized for potentially facilitating coordination among competitors. McDonald’s pricing portal warns that franchisees may be competitors and must comply with antitrust law. The company said the warning is not evidence of anticompetitive conduct and that it takes compliance seriously.