McDonald's is leveraging AI to help its outlets price hamburgers, with Big Mac prices differing by up to 21% between two locations in the same city.

Beating AI News Flash: McDonald’s is using AI to help its stores price burgers. A Reuters investigation found that its “pricing engine” continuously analyzes millions of daily transactions at nearly 14,000 U.S. McDonald’s locations, while also referencing public prices of nearby competitors like Wendy’s and Burger King to estimate how much local customers are “willing to pay,” then generating an “optimal price” recommendation for each item at every store. The system is also used in some overseas markets. AI recommendations are expected to widen existing price gaps between McDonald’s outlets. Reuters found in Fresno, California, that two McDonald’s locations about 3.2 kilometers apart sold the same Big Mac for $5.69 and $6.89 respectively, a 21% difference. However, Reuters could not confirm whether this gap was directly caused by AI suggestions. Unlike Uber’s real-time demand-based dynamic pricing, the AI system analyzes sales and competitor data continuously to provide periodic price proposals to each store; the final price is still decided by franchisees. The recommendations do not always call for hikes—some items have instead been suggested for cuts in recent months. McDonald’s says the tool is only for reference, but five franchisees told Reuters the company closely tracks whether they deviate from the recommended prices. Since this year, franchisees have also been required to “actively cooperate” with McDonald’s-approved pricing consultants and tools, a requirement incorporated into new business standards.