Kroger has alarming plans for digital price tags, lawmakers say

In 2018, Kroger first announced that it was reinventing its price tags in some of its stores. The grocery chain revealed that at about 200 of its locations, it will swap its paper price tags for digital ones, which would allow employees to update prices on items in seconds.

After Kroger recently rolled out the technology to hundreds of other stores last year in an effort to save paper and improve the shopper experience, some lawmakers are starting to become suspicious of the company’s true intentions.

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In an Aug. 5 letter to Kroger CEO Rodney McMullen, US senators Elizabeth Warren and Bob Casey revealed they will launch an investigation into the company’s digital price tags because they are concerned the new technology will open the door to price gouging.

“These digital price tags may allow Kroger and other grocery chains to move to ‘dynamic pricing,’ where the price of basic household goods could increase based on the time of day, weather or other transient events — allowing stores to calibrate price. grows to extract maximum profits at a time when the amount of American income spent on food is at a 30-year high,” the letter said.

The senators also noted that in February, Kroger began working with IntelligenceNode, which is a company that uses artificial intelligence to “deliver dynamic pricing solutions and market analytics.”

They also say Kroger’s partnership with Microsoft to develop its EDGE smart shelves, which display digital price tags and advertisements, is a cause for concern because the technology has the potential to “exploit sensitive consumer data” through tools facial recognition.

“Through a partnership with Microsoft, Kroger plans to place cameras on its digital displays that will use facial recognition tools to determine the gender and age of a customer caught on camera and present them with personalized offers and ads on the EDGE shelf” , it shows. the letter. “EDGE will allow Kroger to use customer data to build personalized profiles of each customer and then use those profiles ‘to determine how much of a price increase each of us can tolerate,’ quickly updating and displaying the customer’s maximum availability of to pay for the digital price. label.”

The senators are giving Kroger’s CEO until Aug. 20 to respond to a list of their concerns, which are outlined in the letter, about the company’s digital price tags and EDGE technology.

“It is outrageous that while families continue to struggle to pay to put food on the table, grocery giants like Kroger continue to roll out price gouging and other corporate profiteering schemes,” the letter said.

Shoppers are seen inside a Kroger supermarket on October 14, 2022 in Atlanta, Georgia.

ELIJAH NEWS/Getty Images

A growing number of retailers across the country are offering paper price tags. Walmart recently announced in June that it would begin moving to digital price tags in its stores after testing the technology at one of its locations in Texas, which yielded positive results.

Walmart plans to expand the technology to 2,300 stores by 2026, as it claims it will help speed up the time it takes employees to update the price of items.

The retailer also dismissed speculation that the new technology would allow it to impose dynamic pricing.

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“There will be absolutely no hour it’s this price, and the next hour it’s not,” Walmart Senior Vice President of Transformation and Innovation Greg Cathey said when discussing digital price tags during an annual shareholder meeting on June 6. June. according to Reuters.

As consumers face higher prices for goods and services across the country due to inflation, the potential for dynamic price normalization is a major concern as it can lead to even more inflated prices.

According to a 2023 survey by Capterra, most US consumers view dynamic pricing negatively. The survey found that 52 percent of U.S. consumers equate dynamic pricing with price gouging, while only 34 percent believe dynamic pricing is beneficial to consumers.

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