Yves here. I was surprised (and perhaps this article missed any comment by Warren on the matter) that the Senator did not mention that the increased prices are likely to violate the licenses of retail stores in many areas. They require prices to be displayed as well so that the seller will honor the posted price. So if the scan of the register comes up with a high number, the seller is responsible for respecting the price next to the items themselves. Stores may try to make up for that by removing the prices of the shipped item but retail store rules generally require these prices to be visible, so that would be a separate violation.
And why don’t customers protest? A simple method, tried successfully in France, was for customers to load shopping carts full and leave them at the store. In the case of French, the store took off quickly.
And yes, I know some readers criticize him for Warren, but this is one area where he can use his bully pulpit effectively.
By Julia Conley, staff writer at Common Dreams. Originally published on Common Dreams
Expressing doubt that the new artificial intelligence-powered “flexible pricing” model used by grocery chain Kroger is really intended to “improve the customer experience,” Sens. Elizabeth Warren said on Friday that this trend shows how “corporate greed is out of control.” “
Warren (D-Mass.) was joined by Sen. Bob Casey (D-Pa.) on Wednesday wrote a letter to the chairman and CEO of the Kroger Company, Rodney McMullen, raising concerns about the way the company interacts with the company’s AI IntelligenceNode. could result in both privacy violations and worse inequities as customers are forced to pay more based on the personal data Kroger collects about them “to determine how much to charge” [they] he knows how to endure.”
As the senators wrote, the chain introduced flexible pricing in 2018 and expanded to 500 of its nearly 3,000 stores last year. The company partnered with Microsoft to develop an Electronic Shelving Label (ESL) system known as Enhanced Display for Grocery Environment (EDGE), using a digital tag to display store prices so employees can change prices throughout the day with the click of a button.
As Warren said on social media Friday, the digital price tags allow stores to “use increased prices for water or ice cream when it’s hot,” or raise the price of turkeys just before Thanksgiving.
A grocery chain @kroger is trying to pull a fast one on us by using digital price tags – a move that would allow them to use higher prices for water or ice cream when it’s hot.
Corporate greed is out of control. @SenBobCasey & I say enough is enough.
— Elizabeth Warren (@SenWarren) August 9, 2024
Through its work with IntelligenceNode and Microsoft, Kroger has gone beyond simply changing prices based on the time of day or other environmental factors, and seeks to adjust the cost of goods to individual consumers.
As the senators explained:
EDGE Shelf helps Kroger collect and use sensitive consumer data. In partnership with Microsoft, Kroger plans to place cameras on digital displays, which will use facial recognition tools to determine the gender and age of the customer captured by the camera and deliver personalized items and ads to the EDGE shelf. EDGE will allow Kroger to use customer data to create individual customer profiles… quickly update and reflect a customer’s greater willingness to pay on a digital price tag—an ability for the company to make profits that would not be possible using a paper price tag.
“I am concerned about whether Kroger and Microsoft are adequately protecting consumer data, and that as Kroger increases the personal information of customers, customers will ultimately be given a worse deal,” Warren and Casey wrote.
Lawmakers have noted that high grocery costs are a major problem for workers and families in the US, as chains take a number of measures to price customers including “cutting down” and “destocking”—filling packages with less produce and maintaining higher prices. although supply chain issues have largely been resolved as inflation was high during the coronavirus crisis.
Kroger, which could quickly increase its store count by a few thousand with the $24.6 billion purchase of Albertsons, had an operating budget of $3.1 billion last year, with net income growth of more than 20% over the past five years.
Meanwhile, say Warren and Casey, American households will spend an average of 11.2% of their budget on food by 2023.
“The use of increased prices will increase the company’s profits – leaving consumers with the bill,” the lawyers wrote. “It is unfortunate that, as families continue to struggle to pay to put food on the table, grocery giants like Kroger continue to impose price cuts and other corporate profit-making schemes.”
Warren and Casey wanted McMullen to provide information about its use of ESL platforms including EDGE, asking how the company establishes prices using variable rates and whether it ever used EDGE to change the price of an item more than once a day, among other questions. .
Senators previously introduced anti-inflation legislation, urged the Biden administration to use its executive power to lower food prices, and proposed a bill to ban price increases by empowering states and the Federal Trade Commission to enforce federal embargoes.