‘Utterly disgusting’ blast customers boycotting over Kroger ‘dynamic’ pricing tech – as some cry ‘greedflation’

KROGER, one of the largest supermarket chains in the country, is facing consumer backlash — and a government investigation.

Two senators have announced they’re looking into the chain’s practices over claims it may be using personal data for “surge pricing” in stores.

Surge pricing, the colloquial term for “dynamic pricing,” is when a company increases service prices based on real-time demand. Ride-share companies Uber and Lyft, which set prices based on driver availability, are famous for their use of such a system.

Now, Kroger is under fire after some have said the company’s electronic labels could be used to increase prices on goods.

In response to consumer fears, Sen. Elizabeth Warren, from Massachusetts, and Sen. Bob Casey, of Pennsylvania, are launching an investigation into the company. The pair of Democrats sent a letter to the company’s CEO asking for clarification on how it will use tech.

“Widespread adoption of digital price tags appears poised to enable large grocery stores to squeeze consumers to increase profits,” the letter said.

It also raised concerns about a partnership with Microsoft and an AI firm, citing fears the company could collect personal data in order to determine how much each individual customer is willing to pay.

Kroger representatives have strongly denied claims of price gouging.

“Kroger's business model is to lower prices over time so that more customers shop with us, which leads to more revenue that we then invest in lower prices, higher wages, and an even better shopping experience,” a representative said to Fox Business.

“Any test of electronic shelf tags is to lower prices more for customers where it matters most," the statement continued. "To suggest otherwise is not true.”

PRICE TAG CHANGES

Much of the fear of price gouging centers around in-store labels Kroger has been rolling out since 2018.

Electronic shelving labels, or ESLs, are meant to reduce the amount of time workers spend updating prices — currently a time-consuming process of manually creating and putting up new signage.

The goal is to save labor costs for the companies — savings that could be passed to consumers.

ESLs have begun rolling out at stores like Walmart as well, bringing greater attention to the tech.

Many have grown concerned that the ease with which stores will be able to change prices may lead to price gouging.

In theory, a store like Kroger could raise prices on food during emergencies to make large profits, a practice banned in most states. The letter suggested more benign possibilities as well — raising the price of turkeys in advance of Thanksgiving, or the price of ice cream on a hot day.

In February, Kroger partnered with an AI firm that lists dynamic pricing as one of its services.

Companies like Kroger and Walmart have insisted ESLs are not being used for surge pricing — but the senators are not buying it.

“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 letter claimed.

The senators did not offer concrete evidence that Kroger was actively using surge pricing.

They listed eleven questions that the senators want Kroger’s CEO to answer by August 20.

It’s not clear if or when the answers will be made public.

Eleven questions for Kroger

Senators Elizabeth Warren and Bob Casey asked the CEO of Kroger to answer eleven questions about AI, labels, and Microsoft's EDGE technology:

1. How many Kroger grocery stores currently use EDGE or other ESL platforms?
2. How many customers are served by these stores?

1. Did any external entities advise Kroger to adopt EDGE and/or continue using EDGE?
2. If yes, who are those external entities?

1. Has Kroger prepared internal estimates regarding the potential to increase prices or profit margins by adopting dynamic pricing with EDGE?
2. How does Kroger establish dynamic prices using the EDGE system?
3. What factors does Kroger consider when changing prices? Please include a description of any time- or volume-based considerations.

1. How does Kroger inform customers of recent or upcoming price changes?
2. How far in advance does Kroger inform customers of price increases that will be implemented using the EDGE system?

1. For all items that have been subject to dynamic pricing using EDGE, what is the average percentage change in price of those items over the first six months of using the system?
2. For what percentage of items has the price increased over the first six months of using the system?

1. Has Kroger ever used EDGE to change the price of an item more than one time within the same day?
2. If not, does Kroger intend to do so in the future?
3. If yes, please list:

1. The locations at which Kroger has changed the price of an item more than once in a day.
2. The complete list of products for which Kroger has changed the price more than once in a day.

1. Will Kroger use customers’ data to institute personalized pricing on its ESL platforms?
2. Will customers have the option to opt out of the collection of personal data through ESL platforms?

The senators requested that Kroger answer these questions by August 20.

Source: Letter from Sens. Warren and Casey

The push comes alongside Vice President Kamala Harris’ attempt to at least partially blame high inflation on corporate greed ahead of November’s election.

SHOPPERS REACT

Some customers are not waiting to hear the CEO’s answers, shaming the company over the price-gouging allegations.

“Utterly disgusting,” one X user said. “Never been to a Kroger, and now no matter where I end up in life, never will.”

They called it “greedflation.”

This has become a common talking point online, though some economists say corporate profits are not a major factor driving inflation.

“I’m so disgusted and disturbed by this,” another said.

Others were particularly worried about personal data being used to set in-store prices.

It remains unclear whether Kroger has any intention of doing this.

The U.S. Sun reached out to Kroger for clarification.

INFLATION NATION

While inflation has cooled down, high prices continue to crunch American consumers.

That’s sharpened fears of price-gouging.

Wendy’s recently faced strong backlash over an apparent plan to implement dynamic pricing at its restaurants.

The company quickly reversed course, though criticism continued to pour in.

Walmart has also faced backlash over its use of ESLs.

While the company was named in the letter, Warren and Casey focused on Kroger.

Lyft's CEO has announced plans to move away from surge pricing.

See the latest inflation numbers.