McDonald’s AI menu pricing creates big cost gaps in California

Think that Big Mac is the same price at every McDonald’s? Think again.

California customers are discovering that the price of their favorite fast-food fix can change from one location to the next — sometimes by a buck or more — as McDonald’s increasingly turns to AI to help franchisees decide what customers may be willing to pay.

The world’s largest fast-food chain has been pushing franchisees to use an AI-powered algorithm that analyzes data from McDonald’s roughly 14,000 restaurants to estimate “customer willingness to pay in your area,” according to Reuters.

And Fresno customers don’t have to go far to find the price differences.

At the McDonald’s at 4505 E. Cesar Chavez Blvd., a Big Mac was listed at $5.69 on the company’s mobile app in September.

Drive just 1.3 miles to the location at 4898 E. Kings Canyon Road, and that same burger costs $6.69.

That’s a $1 difference for the exact same sandwich.

The price gaps extend beyond the Big Mac.

An M&M McFlurry was listed at $4.69 at the cheaper location versus $5.19 at the other restaurant.

The Deluxe McCrispy was $5.99 at 5645 E. Kings Canyon Road compared with $6.49 at the 4898 E. Kings Canyon Road location.

The Deluxe Spicy McCrispy also carried different prices, at $6.79 at the Cesar Chavez location and $6.99 at the Kings Canyon restaurant a little over a mile away.

Exactly how much of the difference comes from the AI recommendations versus individual franchisee decisions is unclear. McDonald’s franchisees have the final say on their menu prices.

For Fresno resident Adam Ramos, the answer is simple: check the app and drive a little farther.

Ramos lives farther from the Cesar Chavez location but said he noticed the price difference and decided the extra drive was worth it.

“And when you order the same thing, there’s sometimes a dollar difference, and sometimes just a couple cents more,” Ramos said on Wednesday.

Gabriel Corral-Cardenas, who stopped at the Chavez Boulevard restaurant because it was closer to where he works, said he had no idea McDonald’s prices could vary from location to location.

“I mean if it’s cheaper here that’s a better deal for the customers,” Corral-Cardenas said. 

He said it’s worth it to save a few bucks and plans to check the app next time,“especially with fast food so expensive right now compared to the previous years.”

Fresno resident Vanessa Aguilar said she knew the Cesar Chavez one is the cheapest in town as she has “been to a couple more and it always comes out to a different price,” because she gets the same thing.

“I mean with this economy, everything’s very expensive right now,” Aguilar said, saying it’s worth it to drive to a cheaper McDonald’s.

Customers at the pricier locations, meanwhile, were stunned to learn pricing varied depending on the locations.

Leticia Oliva, who lives in Fresno, said she had no idea the McDonalds at 4898 E. Kings Canyon road was one of the more expensive McDonalds in the area.

She said she didn’t think the price differences were fair.

“No, I don’t think so. I didn’t even know that until you told me that,” Oliva said.

Oliva said learning that another McDonald’s nearby charges less would make her less likely to return to the higher-priced location.

Another customer at the 4898 E. Kings Canyon Road location, who declined to give his name, said he also didn’t know prices varied and planned to talk with his wife about going somewhere cheaper.

“I always thought they were all the same.”

Franchisees told Reuters that the algorithm has widened the gap between prices on identical items at various restaurants within the same neighborhoods. 

The AI platform also factors in public pricing information from nearby competitors such as Wendy’s and Burger King, according to the report. Both chains have said they do not use AI to make pricing decisions.

McDonald’s pushed back on the idea that AI is setting prices behind customers’ backs, arguing that the Reuters report was misleading.

The company said its algorithm does not change prices in real time. Instead, it makes recommendations that franchisees can accept or reject.

“These speculative and uninformed claims attempt to recast a standard business practice as something controversial. AI does not set the price of a Big Mac or any other menu item,” the spokesperson told The Post.

“The use of pricing recommendation tools and analytics is widespread across industries,” he added. “The pricing portal is a tool, not a mandate, designed to provide restaurant-specific recommendations to help franchisees deliver value for customers and make informed business decisions.”

Still, the revelation comes as consumers are increasingly wary of AI-powered pricing and so-called dynamic pricing, which can change prices based on demand.

Wendy’s learned that lesson in 2024, when it quickly backed away from plans to test “dynamic pricing” on digital menu boards after customers erupted online.

Instacart also faced backlash over a program that showed different prices for the same products to customers ordering from the same store at the same time. The company later ended the program.

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