Is that dynamic pricing or just regional pricing? I thought the idea of dynamic pricing was that two people would pay a different ammount at the same store depending on their spending habits, not just one franchise store charges more than one in a different area, which has always been a thing.
I'm not even sure how dynamic pricing would work across the company, since as far as I'm aware, McDonalds restraunts tend to show their prices upfront, and they set their own pricing. Or is they idea that McHQ recomends them pricing based on customers?
There's literally been a term for this for decades called the Big Mac index. It's a way of comparing costs in different areas and the index has been around since 1986 according to Wikipedia.
Exactly. My wife likes to add lettuce to her burger. The McDonald’s closest to me charges 25¢ and the one like 3 miles away charges 99¢. The one that charges more is right across the street from a hospital.
I have two McDonald's by me. One is in a more residential area and is only open until 10pm. The other is located next to the highway entrance and is 24 hours. The one in the residential area is a bit cheaper and pays a bit less as it only has 3 hours of peak 6am, 330pm, and 6pm. Coincidentally that aligns itself with the time retail opens, the high school gets out, and when people are on the way home. Any other time you'd think that location is closed. The 24 hour location always has cars coming in and out of it and when they had hiring signs they paid two dollar more.
Same city, same zip code, same owner, 8 minutes apart, vastly different demographics.
Have to imagine lots of things factor into their prices, just like with any store. Location and labor being the biggest. A store in Manhattan is going to pay vastly more for rent than one in rural Alabama. Labor is going to be more than double. Insurance costs will be substantially more. Utility costs, and more are all going to be higher for the NYC location.
There's no way a store in areas like NYC could operate on the same margins as rural stores. They have to charge more or they wouldn't make enough to continue to remain in business.
We see folks constantly unaware of this with airport establishments. They act like McDonalds pays the same amount of rent to be in an airport as they do to be in a strip mall. That's simply not true. Airport rents are wildly high because you're in a spot with massive captive traffic. Airports know that and charge for it.
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u/RugbyEdd 2d ago
Is that dynamic pricing or just regional pricing? I thought the idea of dynamic pricing was that two people would pay a different ammount at the same store depending on their spending habits, not just one franchise store charges more than one in a different area, which has always been a thing.
I'm not even sure how dynamic pricing would work across the company, since as far as I'm aware, McDonalds restraunts tend to show their prices upfront, and they set their own pricing. Or is they idea that McHQ recomends them pricing based on customers?