The AI pricing trap

Driving the news: McDonald's spent the past week pushing back against a Reuters report on the technology it uses to make pricing recommendations to franchisees.

• The issue escalated Tuesday, when McDonald's responded to a proposed federal class-action lawsuit citing Reuters' reporting and alleging the system facilitates price coordination among franchisees.
• McDonald's said the lawsuit is "filled with inaccuracies" and that franchisees set their own prices.

The big picture: Consumers are already primed to be skeptical of companies on both prices and AI.

• 80% of Americans believe businesses have raised prices more than necessary to increase their profits, according to the 2026 Bentley-Gallup Business in Society survey.

• 27% trust businesses at least somewhat to use AI responsibly, down from 31% last year.
• The survey polled 3,270 U.S. adults, aged 18 and older, between May 4-11.

Zoom in: Walmart is fighting a similar framing battle.

• CEO John Furner published an open letter last month promising customers that Walmart won't use their income, shopping history, urgency or perceived willingness to pay to charge them more.
• The company has built an "Everyday Affordability" hub with FAQs, fact sheets and explanations of its digital shelf labels.

Walmart corporate affairs chief Dan Bartlett took to X this week to challenge Groundwork Collaborative CEO Lindsay Owens over her use of Walmart as an example of what digital shelf labels could enable — think higher ice cream prices on hot days.

• "The ability to update a display more quickly is not evidence that Walmart uses it, nor intends to use it, for dynamic pricing," Bartlett wrote, emphasizing Walmart won't use the technology for dynamic or individualized pricing.
• "The confusion around Walmart's pricing practices is of its own making," Owens responded. "Walmart says one thing in its damage-control letters to customers, another to its investors behind closed doors, and a different thing entirely to the United States Patent and Trademark Office."

Between the lines: The two companies are using many of the same communications tactics:

• Draw clear red lines: AI doesn't set McDonald's prices. Walmart doesn't price individual people.
• Put senior leaders behind those pledges instead of having spokespeople push back.
• Build owned assets — explainers, FAQs and microsites — that reporters, employees and other stakeholders can point to.

Yes, but: Messages built for one audience don't stay with just that audience.

• During last month's investor day, McDonald's said its pricing engine is "informed by insights from millions of transactions and a broad range of market data" and touted how data collected through its app can help train AI.
• In a 2023 patent, Walmart explained how its labels could change "in a dynamic fashion" depending on the items a shopper has in their cart.
• What sounds like smart business strategy to investors or an innovative product to patent agencies can sound different when reframed to consumers.

Simon's thought bubble: Last week, I described why news frames that feel like common sense can be difficult to dislodge.

• This is a near-perfect example: Most Americans think companies are raising prices more than necessary and don't trust businesses to use AI responsibly.
• So claims that powerful corporations are using AI to squeeze more dollars out of customers resonate.
• That doesn't make the claims true, but it does mean the rebuttals start from behind.

The bottom line: When the issues are this charged, technical precision might not be enough.