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If we're already seeing dynamic burger pricing based on market rates, does McDonald's also plan on offering a burger derivative market so customers can hedge their pricing risk in case unforeseen events cause the burger price to skyrocket?
Maybe instead of spending money on AI to squeeze as much profit as possible you could just fix your self ordering kiosks to not suck? They are painfully slow to the point where you have to click things multiple times because it doesn't register and then when it does wake up it registers the second click on some unrelated thing that you have to undo. Plus half the time the card reader doesn't work so you have to pay at the counter anyways, which they don't staff so it takes forever to flag someone down.
Has anyone actually measured that, though? I'd guess it's mostly a cheap touchscreen and an underpowered board running a bloated Android app, not latency to a server. A round trip is maybe 100ms. These lag for seconds, which sounds like local CPU.
When we sold to enterprise customers, the quote was a negotiation and both sides knew it. Nobody haggles over a Big Mac at the register, so the store just quietly charges whatever the data says a customer will pay.
A meal is a pretty simple fixed-cost item from a retail outlet, not a service with a complex set of dependencies and shifting requirements. The cost of the meal is predictable to the seller - dynamic pricing has only one purpose - gouging customers.
If SaaS/consulting/architectural firms are engaging in price gouging of their customers, that is not an argument to bring the same to the fast food market.
I worked at a restaurant group, and costs aren't that fixed. Beef, labor and rent all swing by store, which is why prices already differ by location. But you're right that the willingness-to-pay guess is the gouging part.
Worked on a pricing model for a delivery app a while back. These things rarely learn you, they learn segments. Your $1 never shows up as a signal, you just don't convert, and the coupon in the app is where the real discount lives.
There was a Jon Stewart podcast on this a couple of weeks ago on Machine Learning and custom pricing. It was an illuminating one. It all looks like a lead up to big consumer action and lawsuit in the future. TBH, McDonald’s pricing might survive as it seems to charge the same for everyone at the same store.
Experienced this first-hand the other day when visiting a newly opened McDonalds in my small town (my first time dining there in ages). A Big Mac meal was $10.80! And what I got in exchange for that price was a poorly assembled burger with almost no sauce.
A couple weeks later, my wife convinced me to try another Big Mac from a different McDonalds. This time, the burger was priced at $8 (not important, but burger tasted a lot better too).
I understand price reflects demand but I can't help but feel a bit scammed.
Or do what I do and buy nothing but the occasional deeply discounted item in the app (free 10 piece McNuggets with $2 purchase, $1 breakfast sandwich, free fries [no purchase necessary]).
Price surging exploits inertial social pressure. If you are out with a group, it is hard to opt out even if the situation feels like you are being taken advantage of in the moment.
they were TRYING to, but the franchises decided to use it as opportunities to raise prices:
"At the company’s August earnings call, CEO Kempczinski called out store owners who didn’t comply with the chain’s under-$3 menu pricing guidance – about a third of total franchisees."
When that new menu rehash happened and they got rid of the 2 for $5 and etc and started adding "value items under $3", what happened was a bunch of franchisees all just instead raised the price of items on that menu to still be "technically correct".
My local market now has a $2.89 McDouble and two-pies-for-$3 which qualifies for that "under $3" metric, but wasn't what the McCEO wanted to see happen.
I will never give McDonald's money after they let Trump use McDonald's to mock Kamala Harris for working at McDonald's. And the food is terrible value for money.
Every store, every hour, a model nudging prices on 40,000 menus. Someone's pricing feed hiccups at 2am and a Big Mac is $0.04 or $97 across a region. Hope there's a kill switch and somebody who knows where it is.
