Grocery Store Digital Price Tags And Facial Recognition Prompt Surge Pricing Fears

CALIFORNIA — Changing technology at the grocery store has some lawmakers concerned that digital price tags and facial recognition could impact costs, according to The New York Times.

The digital tags, which replace traditional paper shelf labels, are currently being piloted in some Kroger stores, and Walmart has plans to deploy the tags to 2,300 stores by 2026, the Times reported, noting they are already widely used in Europe. Kroger operates California grocery mainstays such as Ralphs and Food 4 Less.

Companies tout the befits of the tags, including reduced paper waste and the ability of employees to instantly update prices and keep track of stock. Increased productivity could allow companies to pass the cost benefit to shoppers, supporters contend.

Consumer advocates, however, are raising alarm bells that the technology could allow grocery stores to adopt the surge pricing prevalent in the travel, concert, entertainment, and ride-share industries. They warn that the use of digital price tags and facial recognition in retail could lead to a world where shoppers may unknowingly pay more given the time of day and year and based on their age, gender or ethnicity.

The digital tags will not be accompanied by dynamic — or frequently fluctuating — pricing at Walmart or Kroger, according to the Times, which reported that Whole Foods, Amazon Fresh and other stores already use the high-tech price tags.

Whole Foods and Amazon stores also use artificial intelligence and palm scans to recognize customers, but there are no such plans for Kroger stores after a pilot program with Microsoft was shut down in 2019 due to wires overheating shelves and affecting products, the Times reported. Walmart did not specify whether it was using facial recognition other than to clarify that the technology was not used in relation to pricing, according to the newspaper.

The Times’ reporting comes after U.S. Sen. Elizabeth Warren, D-Massachusetts; U.S. Sen. Bob Casey, D-Pennsylvania; and U.S. Rep. Rashida Tlaib, D-Michigan, all wrote about their concerns regarding the new price tags and the possiblity that facial recognition could raise prices based on shoppers’ race, gender or age.

Though grocery and retail giants have said they don't plan to introduce surge pricing, in the United States, it's perfectly legal. It does, however, tend to illicit backlash when tested in industries where it's not already the standard.

Grocery stores are already facing heightened scrutiny since President Joe Biden accused them of price gouging during the pandemic and subsequent supply chain turmoil. Kroger, especially, is under scrutiny, at the moment, since the Federal Trade Commission and several attorneys general sued to block its mega-merger with Albertsons.

Patch Staffer Paige Austin contributed to this report.