I bought fast food for a group of people last night. The menu pricing was significantly higher than ordering through the app, which also allowed me to attach a digital coupon.
The pricing within the app is what I would expect to pay, or what I believe is “fair” or “reasonable” for chicken nuggets, French fries, and cheeseburgers.
On the other hand, I have cut my fast food consumption by at least half over the last few years because the published menu prices have skyrocketed.
What possible benefit would a fast food restaurant derive from publishing high prices to the casual customer and drastically reducing them within the app?
They have to be realizing a net loss of customers with this model, right?
In: Economics
The real reason: Price discrimination. They make more money overall by making the people who are willing to pay more or value time/convenience higher than the friction of using the app pay more, but keep the more price sensitive customers by offering coupons or discounts from ordering in the app. It’s the same reason why last minute airline tickets are typically much more expensive than advance purchase tickets. Setting a single price leaves a lot of money on the table.
The other reasons they want to drive people to app ordering are real, but they’re just the cherry on top.
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