Demand Pricing for Fast Food?

If you have paid attention over the past couple decades, you know that many things have very fluid prices – it is how hotel rooms and airplane tickets work. In both cases, the product cannot be stored and sold later. An unsold room or seat is lost revenue. Enter “yield management” – trying to sell the entire inventory without undercutting the normal price.

Several fast food chains (McDonalds comes to mind) have switched from a static menu board to an animated TV show that does not list all items at all times. You have to read fast to see the value menu items, for instance. Is demand pricing coming to McDonalds where the price is whatever they think you will pay? Are in-store prices the same as with curbside pickup?

I decided to do curbside pickup today (which I generally like), but it chose the nearest McDonalds instead of the one near my destination. When I switched stores, I was surprised to see a $.40 difference in the 1/4 pounder with cheese – even the Senior Coffee had a different price. Then the thought occurred to me that with an integration of the video menu board with the register and short memories, might prices change based on time of day or current order backlog? That is what they intend to do on our new express toll lanes. I don’t think so, but I remember Amazon being caught showing different pricing based on your zip code.

So how big is the price spread among stores in the same city and is there a pattern discernable? Let’s look at the Quarter Pounder with cheese (made with fresh beef!)

$3.79 – 7721 Pineville Mathews Road – lots of offices nearby, stable strip mall, mostly middle class white employed people

$3.89 – 8824 Pineville Mathews Road – minority franchise near interstate and large hospital

$4.19 – 8560 Park Road – Affluent neighborhood with several schools in walking distance

$3.79 – 9505 South Boulevard – on light rail line near interstate – shopping centers, minimal nearby residential

$4.19 – 6428 Fairview – very old franchisee across from very high end SouthPark Mall (Grand piano in dining room)

$4.19 – 4343 Park Road – Very old franchisee – 1960s secction of Charlotte

$4.29 – 2625 South Boulevard – very badly managed in rough neighborhood on edge of uptown

$4.49 – 1201 W Sugar Creek Road – on I-85 in bad neighborhood

$3.99 – 16834 Statesville Road (Huntersville – Lake Norman, very affluent)

$2.69 (!) – outside Charlotte Metro Market

Interesting, don’t you think?

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