Senators Elizabeth Warren and Bob Casey have sent a letter to Kroger CEO Rodney McMullen expressing concerns about the company’s income-based “price escalation.”
Like many other supermarket chains, Kroger is increasingly using electronic shelving labels (ESLs) to dynamically price products, changing prices based on various factors.
ESLs are digital price tags that allow businesses to set dynamic prices, changing the prices of goods depending on temporary factors such as time of day or weather. By updating price tags with a simple click of a mouse, businesses can impose extortionate prices, suddenly increasing consumer costs at times when certain products are in the highest demand.
According to lawmakers, Kroger has partnered with Microsoft to collect customer data and determine the extent to which price increases are acceptable to customers, so the companies can then offer targeted, personalized pricing.
“The increased use of dynamic pricing will boost corporate profits – leaving consumers to foot the bill,” the MEPs wrote.
“I am concerned about whether Kroger and Microsoft are adequately protecting consumer data and that customers will ultimately be offered worse terms as Kroger expands the personalized customer experience,” the lawmakers continued.
“It is outrageous that grocery giants like Kroger continue to implement price spikes and other profiteering schemes while families continue to struggle to afford food,” the lawmakers concluded.
It remains to be hoped that legislators will succeed in curbing such activities and ensuring fair prices for all customers.
