BUSINESS
Are Kroger supermarkets using surge pricing to raise prices for customers?
Kroger has come under scrutiny as electronic pricing has become a trend across consumer industries, and it was one of the first to adopt the practice.
Following Kroger’s lead, Walmart has announced that they will adapt and replace their traditional price tags with electronic ones that can be changed at a moment’s notice for hundreds of products. This has led to concerns by consumer groups and political leaders, who worry that surge pricing could be used to exploit shoppers when they are buying some of the most essential goods for their household: food.
Massachusetts Senator Elizabeth Warren, who headed the Consumer Financial Protection Bureau before being elected to Congress, and Pennsylvania Senator Bob Casey sent a letter to Kroger’s CEO asking him to provide answers to important questions about the emerging trend of digital pricing. Kroger is the largest grocery store chain in the country and has the most data on the practice, as it began implementing it in 2018.
Walmart and other major corporations follow Kroger’s lead on electronic pricing
When Walmart announced in early June that they would be taking the technology tested in a small number of stores to over 2300 stores by 2026, they left out many predatory ways the tech could be used on consumers. Instead, the company focused on limiting the time store staff spends replacing price tags and allowing them to “spend more time assisting customers and less time on repetitive tasks.” And, while in the short-term, that may be true, there is no saying that Walmart will not cut back on hiring or let go of some of its staff if they are no longer needed. Additionally, for consumers, Senator Warren poses an important question: could prices surge dramatically for ice or popsicles on a hot day?
Kroger will have until August 20 to provide a response to the written questions.
Kroger was an early adopter of electronic pricing, which made it a target. The supermarket chain has responded that its aim is to lower prices for customers, but political leaders are not convinced. In the letter, the two Senators asked Korger to detail instances where the prices for a single good were changed more than once a day to provide an indication of how often the tool is used and how those cases impacted customers.