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McDonald’s Uses AI Tool to Recommend Different Prices by Location

The portal recommends restaurant-level prices using local willingness-to-pay estimates, prompting franchisee complaints and antitrust scrutiny.

Overview

  • A Reuters investigation published late September revealed McDonald’s is using a machine‑learning pricing portal that analyzes millions of transactions to recommend an “optimal price” for each restaurant.
  • The system labels locations by price sensitivity and uses an estimated local ‘willingness to pay’ plus published competitor prices to produce menu recommendations for individual outlets.
  • Several franchise owners say they felt pressured to follow the recommendations, and company documents reviewed by reporters show McDonald’s logs when stores deviate from suggested prices.
  • Independent checks found wide price gaps at nearby outlets — for example, a Big Mac listed at $5.69 at one store and $6.89 two miles away — though reporters could not prove the engine alone caused specific differences.
  • The platform is reported to be run by Tiger Analytics with McDonald’s setting pricing rules, the company calls the portal a recommendation tool, and U.S. regulators are examining whether algorithmic pricing risks illegal coordination or harm to consumers.