Democratic Congresswoman Rashida Tlaib has addressed Kroger regarding the company’s alleged plan to implement digital price tags, potentially altering prices based on various factors such as time of day and weather. Of particular concern is Kroger’s proposal to install cameras in stores for facial recognition purposes.
Reports emerged over the summer indicating that Kroger is collaborating with Microsoft to use electronic shelf labels (ESLs), integrating artificial intelligence to enable dynamic pricing in its stores. This initiative is expected to include Enhanced Display for Grocery Environment (EDGE) shelf displays, which reportedly will have cameras to capture customer data, including facial images, for more personalized advertising.
In her letter dated October 11 and publicly shared recently, Representative Tlaib, who represents Michigan, a state with 120 Kroger locations, expressed her apprehensions about these technologies. She highlighted studies indicating that facial recognition technology often exhibits flaws and can lead to discrimination, particularly in Black and brown communities. Tlaib emphasized that these racial biases should not be extended into grocery stores.
Kroger, the largest grocery chain in the U.S. by revenue, owning brands such as Ralphs, Fred Meyer, Pick’n Save, Food 4 Less, and Dillons, has been criticized by Tlaib for potentially using ESLs to collect customer data and create personalized profiles. This data could allow the company to assess the maximum price customers might be willing to pay for goods.
The concept of dynamic pricing combined with tailored advertising has drawn parallels to the 2002 sci-fi movie “Minority Report,” where personalized ads were served based on identity details.
In response, Kroger told Gizmodo via email that its business model focuses on lowering prices to draw more customers, asserting that more shoppers are choosing Kroger because of their efforts against inflation and the value offered. Kroger denied using ESLs for price increases, stating that the technology aims to reduce prices where it benefits customers most.
This statement mirrors a prior response from Kroger to CNN, also denying engagement in “surge pricing.” Kroger maintains that any tests involving electronic shelf tags focus on lowering prices, disputing suggestions to the contrary.
Concerns about facial recognition are not isolated to Tlaib. Senators Elizabeth Warren and Bob Casey, both Democrats, previously raised similar issues with Kroger, questioning potential exploitation of customer data through these technologies. Their letter likened dynamic grocery pricing to the airline industry’s model, which might introduce unnecessary urgency and scarcity.
Kroger’s current scrutiny extends to a proposed $24.6 billion merger with Albertsons, under review in state courts in Washington and Colorado over antitrust issues. In a Denver District Court, Kroger executives defended the merger, arguing it’s necessary to compete with Walmart’s grocery business. The Federal Trade Commission (FTC) has challenged the merger, asserting it may reduce competition and elevate prices for consumers.
