McDonald’s uses AI to set an optimal price at each store, Reuters reports

McDonald’s is using an AI pricing engine to recommend what each of its nearly 14,000 restaurants should charge for every menu item, Reuters reported on Tuesday. The engine covers the US and some markets abroad. One factor the engine weighs is an estimate of how much each store’s customers are willing to pay.

Waylon Cunningham reported the investigation for Reuters. He reviewed screenshots of the pricing engine taken in August and interviewed nine people with first-hand knowledge of the chain’s strategy.

The engine uses machine-learning algorithms to analyse data from millions of daily transactions. It produces what McDonald’s calls “the optimal price” for each item at each location, from Big Macs to discounted coffee for seniors. McDonald’s has used some form of AI pricing tool since at least 2019, according to Reuters.

A Big Mac for $5.69, or $6.89

Three franchisees told Reuters the engine has widened price gaps...

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