How McDonald’s uses AI to recommend menu prices

McDonald’s uses a machine-learning system to recommend menu-item prices for individual restaurants. According to an AI News report based on Reuters reporting, the platform analyses millions of daily US restaurant transactions, publicly available competitor prices, and estimates of local customers’ sensitivity to price changes.

The technology is not generative AI and does not automatically set prices. McDonald’s describes it as an advisory tool that produces restaurant-specific recommendations for operators and franchise owners to consider.

Local price differences and the limits of the evidence

Reuters examined two company-operated restaurants roughly two miles apart in Fresno, California, where a Big Mac cost $5.69 and $6.89 respectively. The reporting did not establish that the pricing engine caused the difference; nearby restaurants can also face different costs and local market conditions.

McDonald’s has used some form of AI-assisted pricing since at least 2019 and now distributes recommendations to franchisees periodically. The company says roughly 90% of its US restaurants and nearly 95% of its global locations are independently operated, with franchisees retaining responsibility for final prices. Some franchisees told Reuters they had felt pressure to follow recommendations, a characterisation McDonald’s disputes.

Restaurant-level, not personalised pricing

The available reporting says the system estimates willingness to pay at the restaurant level and does not indicate that personal customer data is used to set individualised prices. That distinguishes it from personalised pricing, where a business changes what a particular consumer pays based on information about that person.

Algorithmic pricing nevertheless attracts competition scrutiny. Screenshots of McDonald’s platform reviewed by Reuters include an antitrust warning noting that restaurant owners may compete with one another. The warning alone is not evidence of anticompetitive conduct, and US authorities have not accused McDonald’s of the practices alleged in separate hotel- or rental-pricing cases.