McDonald's Tests AI Menu Pricing, Sephora Lands at M&S & Toast Moves to the Pump

[upbeat music] Hello everyone, this is Omni Talk Retail. I'm Chris Walton, and you are listening to the Retail Daily Minute, your quickest, fastest breakdown of all the day's top retail news. Today's podcast is brought to you once again with the help and support of R&S Logistics. Are you looking for a fulfillment and distribution partner that's just right? Well, R&S Logistics is small enough to provide custom solutions and that personal touch, while also still boasting two million square feet across 10 locations in the Southeast. With technology that can scale your growing e-commerce operations, visit rswarehousingsolutions.com and get your quote today. And I'm also pleased to introduce Zenline AI, because you have likely heard about AI agents 1,000 times this year, but are also probably wondering what they can do for you as a retailer. Visit tryzenline.ai to book a call and see how agents can bring you more margin. Today is September 30th, 2026. Hello again from Nashville, and this morning we've got news on Sephora's big push onto the UK High Street through a new partnership with Marks & Spencer, and Toast's move to take over the convenience store from the counter all the way to the pump. But we begin today with McDonald's and a pricing story that leaves me going, "Why? Why, McDonald's, have you not learned anything after the PR disaster that was your CEO eating a hamburger just a few months ago?" According to a Reuters investigation, McDonald's has been using AI to dynamically price menu items across the US and some global markets. The algorithms estimate what customers at each individual location are willing to pay. The price gaps that result can be pretty striking. Reuters found a Big Mac for $5.69 at one Fresno, California location and $6.89 at another location just two miles down the road. That's roughly a 21% difference for the exact same burger if you're keeping score at home. McDonald's says franchisees are free to set their own prices, and it has called the Reuters reporting speculative and uninformed. But several operators told Reuters they feel pressured to follow the tool's recommendations. Internal documents reportedly show the company tracks when franchisees deviate from them, and CEO Chris Kempczinski has told investors that pricing non-compliance can come up in contract renewal conversations. The pricing portal's own terms of service also warn users to comply with antitrust law. A former federal antitrust regulator told Reuters that language amounts to an acknowledgement of a potential problem. Here's the thing, McDonald's earns much of its money from a percentage of each restaurant's sales, so its incentive to push prices up is obvious. But Kempczinski himself has said low-income customer traffic has declined nearly double digits over the past two years. Squeezing more out of the customers you still have is not the same thing as winning back the ones you've lost. And we've seen this movie before. Wendy's had to walk back its dynamic pricing comments in 2024. Instacart ended its AI pricing tests after a consumer backlash, and Walmart CEO John Furner just within the last week publicly vowed not to use personal information to