United States Senators Elizabeth Warren and Bob Casey expressed concerns that Kroger, a major US supermarket chain, may be engaging in dynamic pricing, the Cincinnati Enquirer reported.
The senators addressed a letter to Kroger CEO Rodney McMullen, raising concerns that the electronic shelf labels (ESLs) in stores could be artificially inflating prices during periods of peak demand. They pointed out that the dynamic-pricing practices typically used by airlines, hotels, and ridesharing services may now be creeping into the retail sector.
The policymakers sounded the alarm about the use of dynamic pricing for groceries, particularly as Americans’ food expenditures have hit their highest point in 30 years.
‘It is outrageous that, as families continue to struggle to pay to put food on the table, grocery giants like Kroger continue to roll out surge pricing and other corporate profiteering schemes,’ the senators wrote in their letter to McMullen.
‘Everything we do is designed to support this strategy, and customers are shopping more with Kroger now than ever because we are fighting inflation and providing great value. Any test of electronic shelf tags is to lower prices more for customers where it matters most. To suggest otherwise is not true,’ the company answered in an email.
Burt Flickinger III, founder of the Strategic Resource Group and a consultant to companies like Kroger in the grocery industry, stated that stores are not using ESLs for dynamic pricing, suggesting that the senators’ inquiry seems to be based on speculation.
He also noted that ESLs can significantly reduce grocery stores’ labour costs by enabling them to reassign stockers, who would otherwise be manually changing labels, to other tasks.
Kroger, which runs nearly 3,000 US stores, started using ESLs in 2018 with its Kroger Edge technology, enabling instant price changes across multiple locations. Initially promoted as a consumer-friendly tool, Edge features video ads and coupons and enables shoppers to use their smartphones to search for brands and products based on dietary preferences.
Other grocery chains have followed in Kroger’s footsteps. In June, Walmart, one of the largest supermarket chains in the US, announced plans to roll out ESLs in 2,300 stores by 2026. Whole Foods and Amazon Fresh have also begun adopting this technology. As ESLs gain in global popularity, the number of challenges associated with their use continues to grow each year.
