The food professor, also known as Dr. Sylvain Charlebois, is exposing McDonald's for altering its prices depending on the location — thanks to new AI tools the company is using.Charlebois, who is an agri-food professor and operates an agri-food lab out of Dalhousie University, has shown on X that there are different prices for the same McDonald's menu items at three different locations in Halifax, Nova Scotia.Charlebois uses the example of a Double Big Mac meal, which ranges from $11.99 to $12.79 depending on the location.So, why do these prices differ?.As Charlebois explains it, "A pricing engine helps set prices by location."These pricing tools are controlled by none other than AI, a type of surveillance pricing tactic the company is using in an effort to increase its revenue. The AI collects the pricing habits from each location and then estimates through algorithms a "customer's willingness to pay," as Reuters reports. McDonald's is encouraging franchise owners to use the tool and says its franchises are free to set their own prices based on AI recommendation..In detail, the AI-pricing engine uses machine learning algorithms to continuously analyze data from millions of daily transactions across over 1,400 McDonald's locations in Canada and generates an "optimal price" for each location and each particular menu item.The engine even pulls public pricing data from online menus of nearby restaurants of competitors, including Wendy's and Burger King, to help determine its prices. According to Reuters, although McDonald's has said it allows their franchise owners to set their own prices, five American store owners have said they were pressured into using the AI-pricing tools.Reported by the New York Post, a McDonald's spokesperson has argued that this Reuters report was misleading, since the AI price tool does not set prices in real time, but only suggests prices to franchisees, who make their own decisions.."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," claimed the spokesperson."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."Back in 2024, George Michell, a Connecticut franchisee, sued McDonald's after his restaurant was flamed online for charging $18 for a Big Mac meal.He alleged the AI tools suggested the price and the company tried to oust him for discriminatory reasons..McDonald's had disputed the claims in the lawsuit and alleged Michell repeatedly violated the franchise agreement.The case is currently ongoing, though the claims surrounding McDonald's breach of conduct have been dismissed. In January, McDonald's updated its business standards to require franchisees to be "constructively engaging with McDonald’s approved Pricing Consultant and Tools," according to a message sent to franchisees.In Canada, the only province which that currently has restrictions surrounding dynamic and surveillance pricing is Manitoba, which enacted Bill 49 in June.
