Senators Warn Kroger's Digital Price Tags May Enable Gouging 118
U.S. Senators Elizabeth Warren and Bob Casey have accused supermarket giant Kroger of potential price-gouging through its adoption of electronic shelf labels (ESLs). In a letter to Kroger CEO Rodney McMullen, the lawmakers expressed concern that ESLs could enable dynamic pricing of groceries, potentially creating artificial scarcity and inflating prices of essential goods.
Kroger, which operates nearly 3,000 stores nationwide, began implementing ESLs in 2018 under the "Kroger Edge" program. While initially promoted as a consumer-friendly technology offering video ads and personalized shopping assistance, the senators argue it could lead to "surge pricing" similar to ride-sharing services. The lawmakers' concerns reflect broader scrutiny of differential pricing practices across industries. The Federal Trade Commission recently launched an investigation into such tactics, which have been observed in sectors ranging from e-commerce to travel booking.
Kroger, which operates nearly 3,000 stores nationwide, began implementing ESLs in 2018 under the "Kroger Edge" program. While initially promoted as a consumer-friendly technology offering video ads and personalized shopping assistance, the senators argue it could lead to "surge pricing" similar to ride-sharing services. The lawmakers' concerns reflect broader scrutiny of differential pricing practices across industries. The Federal Trade Commission recently launched an investigation into such tactics, which have been observed in sectors ranging from e-commerce to travel booking.
How about Uber (Score:3)
Re:How about Uber (Score:5, Funny)
And the airlines! Every flight from A to B by the same airline should cost the same no matter what time you're flying or how far ahead you booked your ticket. Right?
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I would argue that flights in distinct hours of the day are not exactly the same thing and may have different prices, just like movie theater sessions.
But airlines actually charge distinct prices for the same flights in their websites depending on several aspects, including information collected from your navigation and make impossible for buyers to know the prices in advance. Now, that, truly annoys me!
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And the airlines! Every flight from A to B by the same airline should cost the same no matter what time you're flying or how far ahead you booked your ticket. Right?
Compared to most forms of surge pricing, airlines (and hotels) are relatively straight forward. You've just got to get your head around the concept of fare buckets and you're 90% of the way there. It's also a lot more predictable, cheap seats are usually sold a fair bit in advance, so the bucket that has all the cheap seats is usually sold out early (3-6 months, depending on flight). Then you've only the more expensive buckets left, if there's anything left in these buckets as the date approaches they'll st
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When a hurricane is barreling down on Florida and all the plywood starts to disappear from the home center, the price of plywood goes up, so lumber trucks headed to South Dakota are diverted to Florida, causing a guy in South Dakota to not be able to build a dog house this weekend.
Besides the Price Mechanism he tax on unsold inventories ensures all materials can only be delivered just-in-time.
Well, Duh! (Score:4, Insightful)
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Don't forget about variable rate tollways! They change the cost based on current traffic conditions. I think it's pretty messed up.
Its basic supply and demand. Or do you like paying the lower toll rate just to sit in bumper to bumper traffic? I think that is messed up.
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When the Illinois tollway went from coin machines to RFID I embraced it with mixed feelings. It was great because it mostly alleviated long traffic jams before toll booths around Chicago. But I knew that the rates would go up incrementally and nobody would notice. Before RFID came along, every time they wanted to raise the rates by a nickel there was a huge uproar among people and newspapers. After RFID, nobody cared, because cash wasn't leaving their hands and into the toll booth. It was as if it was play money. That's the same reason when my kids received gift cards for birthdays, I forcibly exchanged them for 80 cents on the dollar with cash. 80% so they became aware of how much of their paychecks they'd be giving the government (and they'd always leave some residual balance on the card anyway because it wouldn't buy them anything) and cash because when you are spending cash and you know you have a finite amount of it, you'll be more careful in your spending, whereas a gift card seems just like play money.
This is also why banks want you to pay for everything with credit cards. People don't see that as spending their own money, in fact many crow that they're spending the banks money (forgetting the fact that they're now beholden to the bank and the bank always gets it's money back and some). People just don't take as much notice of pricing when they don't feel it's coming directly out of their pocket. Countless research has shown that people will spend more on credit.
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And I suppose.... (Score:4, Interesting)
I suppose you need to use your Cell Phone to get a price of an item, so Kroger can see what you looked and and start sending ads to your phone.
I really miss the days when every item had to be marked with a price. These days it is impossible to know what many items cost due to how prices are displayed. This is because many items do not line up with the price tag on the selves. I it was up to me, I would mandate ever item has a price tag on it.
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These days it is impossible to know what many items cost due to how prices are displayed
If you have doubts over whether the price tag is for the product you're looking at you just check the UPC on the product versus the tag. A mild irritation if you have to do it often but hardly "impossible".
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I do this when something is on sale or being discontinued. Want to verify it's the product advertised so when I check out I get the right price. I wouldn't even call it an irritation. More, "Trust, but verify".
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Well they made it sound like they were having this problem of uncertain prices a lot and I think plenty of folks would find having to check the UPC regularly at least a bit annoying.
Personally though it's awfully rare I'm uncertain about what a price on the shelf applies to so I wouldnt call it an irritation either. All I can think is that maybe the above shops at very different types of stores than I do.
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A mild irritant if you don't have presbyopia or cataracts or dyslexia or colorblindness or any other kind of condition which makes comparing narrow multiple numerical sequences at 6pt font on multiple tiny fading pieces of paper under bad lighting very difficult. But you're right, it isn't impossible. Just like it isn't impossible to read the TOS of every piece of software or to read the legal disclaimers flashed on the screen during pharmaceutical commercials.
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Pretty sure they're the same as everyone else is using. eInk displays that spend 99% of their time asleep but wake up every few minutes, connect to WiFi and see if there is a price update.
If you're going to need your cell phone to get the price of an item, they could just print QR codes or even UPC barcodes on paper labels.
On the one hand, the digital tags are great for sale prices. Nobody has to go around the store placing physical sale tags on the shelves every week. They all update overnight. On the
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>I suppose you need to use your Cell Phone to get a price of an item,
I suppose that would be one way.
Or, just for fun, you could read the price from the display in question . . .
Gas station signs? (Score:3)
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The gas station signs aren't updated by an algorithm that tracks the demand for gasoline in real time and hikes the price when it decides a bunch of people might be coming to fill up.
The digital part isn't the problem, it's the ability for remote and automated updating that creates the potential for abuse. And it absolutely WILL be abused... they've been testing the waters for months.
=Smidge=
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The gas station signs aren't updated by an algorithm that tracks the demand for gasoline in real time and hikes the price when it decides a bunch of people might be coming to fill up.
How do you know this? Why couldn't they be?
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By looking at the signs? Around here they update once a day around 10 am and that's it.
They COULD, sure. When speaking about computers there's a lot of things that're possible. People would raise a fuss if they saw the price going up while they're in the process of filling the tank, though.
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No, they don't. Stations change the pumps and signs in accordance with the direction of movement. Signs first if up, then the pumps, pumps first if down, then the signs. People (other than you I guess) know this and don't blink when the sign changes. I'm surprised it's never happened to you, it's not unusual at all, must be a dozen times in my life at least.
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What can I say; they don't here.
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Right. And so to be equal in a grocery store, price tags should never change while customers are present with items in their carts, because the price could change after the item is in the cart.
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Some places used to do it in Japan, not sure if they still do. Umbrellas cost more when it's raining. From what I observed it probably cost then more money due to the amount of complaints. Every time it rained there was some guy arguing at the checkout about it.
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The gas station signs aren't updated by an algorithm that tracks the demand for gasoline in real time and hikes the price when it decides a bunch of people might be coming to fill up.
The digital part isn't the problem, it's the ability for remote and automated updating that creates the potential for abuse. And it absolutely WILL be abused... they've been testing the waters for months.
=Smidge=
I think they are, which is why several countries have passed a law that states signs cannot be changed during the day. If you really want to see more meaningful competition between petrol stations, pass a law that states every petrol station must register their price the day before, then have a website that shows them all, that way you can easily find the cheapest fuel in your area (although in practice, it's often best to pick the 2nd cheapest as the line will be shorter).
nah, it'll never work (BTW, for [wa.gov.au]
We regulate the shit out of gas prices (Score:2)
So yeah if you want to basically socialize the last mile of food distribution like we have with the farm bill and basically create a system similar to what we do with gas prices sure, you're basically threatening me with a good time. Go right ahead. But I'm going to go out on a limb here and say that is probably not what you're after.
People do not r
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There are laws about how much and how often they can be raised and the government heavily manipulates the price by maintaining large amounts of reserves.
Depends on where you live. In Wisconsin, the state has a minimum mark-up law that applies to just about everything, from food to fuel to beach balls. Gas price is generally based on that.
The state does NOT set the price directly. The price CAN exceed the minimum, if the seller wishes.
Last night I drove across the southern part of the state. Fuel prices climbed steadily as I got closer to Milwaukee, going up 30 cents per gallon over 30 miles. Cross the border to Illinois, the price went up another 30-50 cent
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>> the national fuel reserves the feds hang onto have been depleted
No they haven't. "The reserve currently holds 376.5 million barrels"
https://www.reuters.com/busine... [reuters.com]
Meanwhile the price of gas where I live is $2.85/gallon, amazingly cheap.
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376.5 million, down over 200 million since 2022? Sounds like it's depleted to me. Not to mention that it's primarily high-sulfur fuel that is not currently favored in our fuel supply.
It's maintaining its 90+ day mandated reserve simply because we're burning a lot less than when that standard was set decades ago.
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376.5 million barrels is not 'depleted', and high-sulfur oil is what the gulf coast refineries are geared to.
https://www.eia.gov/todayinene... [eia.gov]
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Now,
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WOW.
Are those actual, realistic gas prices where you are?!?!?
Just a week or so ago when I got gas....was like $2.97/gal.
I'm in the New Orleans area....what part of the US are you in with such high prices?
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You think Elizabeth Warren hasn't complained about gas station price gouging?
I actually disagree with her on price gouging, although I *do* think it's a bad idea for a technology that allows a company to change the price of an item between the time you pick it off the shelf and the time you check out to go unregulated. Here in Massachusetts, grocery item prices are required to be physically marked on both the item and on the shelf, and stores aren't allowed to charge you more than the lowest price marked
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Those signs are there because of immense competition in that business with minimal margins. It is a single commodity, often with multiple stores within sight of each other, all with huge signs advertising the price.
Most gas stations break even or even lose money on gas. They make it up on the sodas, chips, etc. they sell. That is why they charge a lower rate for cash - the credit fees are enough to make them lose money.
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Here, someone tabled a bill legislating that such signs can be updated only once per day. I don't know if it was/will be passed.
Electronic price labels (Score:4, Insightful)
While initially promoted as a consumer-friendly technology offering video ads and personalized shopping assistance, the senators argue it could lead to "surge pricing" similar to ride-sharing services.
Electronic labels are primarily a cost-saving measure so you don't have to pay someone to slide in newly printed stickers whenever they change prices.
Going after businesses for being able to update prices electronically isn't going to hide inflation you nutsacks.
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Not Always Bad (Score:2, Insightful)
While people hate the idea of "surge pricing" for groceries, there are examples where it might not always be bad. Remember the great toilet paper shortage of 2020? A lot of that was people all rushing out to buy toilet paper for fear of scarcity. If there had been surge pricing, a lot of the panic buying might have been eliminated and there would never have been a shortage.
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Usually this is solved by limiting the amounts sold. "max 2 per customer per day". Some might want to invoke all sorts of reasons why this will not work (people will go to several shops, people will come several times...), but it is a usual solution when there is a low stock on a high demand product (e.g. hand made Christmas/Easter delicacy on the day before, or discounted products).
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Didn't help in the TP debacle. High prices also encourage producers to make more product by giving them an economic incentive.
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While people hate the idea of "surge pricing" for groceries, there are examples where it might not always be bad. Remember the great toilet paper shortage of 2020? A lot of that was people all rushing out to buy toilet paper for fear of scarcity. If there had been surge pricing, a lot of the panic buying might have been eliminated and there would never have been a shortage.
What you describe is called price gouging, not surge pricing. It's a shitty thing to do, and it's explicitly illegal in quite a few states. The proper way to handle that kind of panic buying would be to set purchase limits.
Price system produces better results (Score:3)
What you describe is called price gouging, not surge pricing. It's a shitty thing to do, and it's explicitly illegal in quite a few states. The proper way to handle that kind of panic buying would be to set purchase limits.
Purchase limits fail because they assume every person holds the same demand for an item. The guy with a newborn at home and the guy with triplets have different demand for diapers. Purchase limits per buyer don't account for individual buyer demand. Furthermore, a "limit 2" sign will encourage buyers who would have otherwise only bought one to buy two instead, due to the perception of scarcity.
The price system, on the other hand, both matches available supply with demand AND signals buyers to reduce consump
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The price system, on the other hand, both matches available supply with demand AND signals buyers to reduce consumption. Because retailers didn't (or couldn't) raise prices of toilet paper during the early days of the COVID pandemic, the shelves were stripped bare. The price remained cheap, and buyers were never slapped with a dose of reality. Everyone bought TP when it was available because everyone could easily afford "limit 1". If "limit 1" cost $50 instead of $15, those packs would have been left on the shelf for those buyers willing to pay up (those people without a stockpile).
And then a ton of poor people wont be able to afford TP because it's too expensive for them. At least with unit limits they have a chance at getting the product at a price they can afford.
In other words, what a great way to make being poor even harder.
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They're more likely to be able to afford 1 roll and people are more likely to conserve (use like 4 sheets instead of 12) with high prices than to be forced to do without because of bare shelves but with original prices.
With unit limits you have people visiting all the stores and having their kids buy the limits as well. Didn't help availability.
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What you describe is called price gouging, not surge pricing. It's a shitty thing to do
I see what you did there
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There have been multiple studies of purchase limits, and they have been found to be relatively inefficient. People will spend more resources to get around them, and it is seen as a reason to stockpile. You say "limit 4", and people take it as a reason to buy 4 instead of the one they need. Same idea with sale signs saying things like "5 for $5". Even though it really just means $1 each, people are more likely to buy 5.
Limiting gasoline purchases, for example, were found to be downright negative, because
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Interesting, though those studies don't seem to agree with my experience.
Toilet paper at the beginning of the pandemic, no limits, people filling up there buggy with tp, even buying it by the pallet with the store helpfully using their fork lift to load it. When the tp came back with 2 package limits, people seemed to generally stick with the limits, sure some probably went to different stores or the same one multiple times but generally there was usually tp available.
Gasoline, after the floods the other ye
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Doubt it.
I think it would have caused even more people to try arbitraging TP and cleaning products than we already had.
What about Amazon? (Score:2)
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"One study found that prices on Amazon fluctuate frequently throughout the day. In fact, researchers discovered that certain items had price changes multiple times within a 24-hour period. These fluctuations were often influenced by factors such as availability, demand, and even competitors’ pricing strategies.
Another research effort focused on dynamic pricing techniques employed by Amazon. It revealed that the company utilizes sophisticated algorithms to adjust prices based on various factors like cu
Corruption, schmerruption, it's just technology. (Score:3)
All well and good, but I think the Senators are missing some upsides. For example, they could pay Kroger to update them daily on the prices of hamburger and (yes) gas, so that, when campaigning, they can hide how out-of-touch they are when someone asks them a gotcha question in a town hall.
Hell, if they pay Kroger enough, maybe they could even be allowed to set the prices for a limited period.
hot lanes pricing (Score:2)
You're right. The toll should be 24x7 & const (Score:2)
I'm serious. Variable tolls in particular may make sense for reasons I'm unaware of, but it's pretty bogus making the consumer guess what [INSERT PRODUCT NAME HERE] is going to cost at any given moment in time.
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It's not hard to guess, because it's going to cost about the same as it did yesterday at the same time of day.
And if you agree that time is interchangeable with money, then variable tolls and fixed tolls and no tolls all costs you the same! (Depending on how much your time is worth, of course.)
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So don't shop there (Score:2)
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You point out that 55% of the grocery industry is made up of two players but don't see how that completely takes part what you say after?
If 55% of the grocery industry is made up of two players that means there are a ton of communities that will only be served by these two players and thus dont have a realistic choice to shop where these type of practices are implemented. There's also the fact that if one or two more major players jump onto this you're looking at more like 75% of the grocery industry and th
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55% or 44.5%, it doesnt make a difference. I read your post wrong but either way it's roughly half the grocery industry.
There are sure to be some parts of the country under a duopoly. But most people are not likely to live under that scenario. There are 5 different grocery stores with 2.5 miles of my home. Two within one mile.
I think you live in a higher density part of America and are making assumptions based on that. There's a LOT of this country where people have very little selection in regards to where they shop for food.
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That is 55% of the market dominated by other companies
Sort of. Regional brands carve up the country the same way cable companies do. They have regional oligopoly share, just not nationwide. To the individual consumer, that doesn't make much difference.
Consumers to Kroger: "We had a deal!" (Score:2)
Yet gas prices have been like this for years. (Score:2)
Honestly, the whole, 'They might do this" attitude is pretty poor, considering we have a US Supreme Court that has no rules about ethics, and politicians have been doing insider trading for decades. Just because they COULD do something doesn't mean they will.
I would never shop there (Score:2)
simple solution (Score:2)
While initially promoted as a consumer-friendly technology offering video ads and personalized shopping assistance, the senators argue it could lead to "surge pricing" similar to ride-sharing services.
There's a simple way to fix this. Enact a law that says 'surge pricing' also means 'equivalent surge paycheck' for the workers who have to endure the effects of the surge. Boom, instant self-regulation.
I'm pretty sure ... (Score:2)
A simple regulatory fix (Score:2)
Legislate that for any given item outside of perishable goods such as produce, the price can't change more frequently than once per week. Assign penalties for infractions starting at one percent of a corporation's yearly gross take, and escalate rapidly to fines as high as 100% of yearly gross. Enforce vigorously. Problem solved.
Enough of this shit that "the lawmakers expressed concern that ESLs could enable dynamic pricing of groceries, potentially creating artificial scarcity and inflating prices of essen
ALDI has digital price tags too (Score:2)
Their prices have gone up like everyone else, but I still find them to have lower prices than the other grocery chains in our area.
You don't need ESLs for that (Score:2)
Re:Kohls has had digital price tags for years (Score:5, Informative)
Walk into any Kohls, the price tags are all digital. Never heard a complaint
Then apparently you haven't heard my complaints. The big problem in Kohl's is that the tags are not placed in front of the items being priced. The trick is to place a cheaper item's tag in front of the more expensive item.
The other bug is that the batteries in these things die, and when there are a million of them in the store, the one I want to know the price of is dead.
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Right, that's real useful when the tag is 3 inches above the floor, there are 3 numbers and bar codes on the tag, and the number is written in 3 point type.
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Admittedly as I get older and ignore needing reading glasses it becomes a Mr. Magoo situation, but if the store can't bother even including the barcode on the price tag it might be time to shop elsewhere.
There's more competition with clothing (Score:2, Interesting)
When I was a kid there were seven or eight locally owned grocery stores and they all competed. There were sales every week. I remember when they were just three of them in my town by the time I was an adult and two of them merged leaving just those two. Prices immediately and noticeably went up.
We have s
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If the Democrats are put in charge they will at least enforce antitrust law and stop inflation and maybe get us a little bit of deflation which is sorely needed.
LOL Good one.
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Nobody wants deflation unless they're sitting on a large pile of cash and want to see the world burn, and/or believe in some particularly wacky flavors of libertarian economics.
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You know who has a relatively large amount of cash and very few assets? Poor people. Rich people love inflation - devalue your debts while not losing anything on what you own? Yes, please.
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Poor people have large amounts of cash? LOLWUT? Poor people tend to have little to negative cash in the bank plus commonly high debt loads.
Rich people should hate inflation more than they do if they're still hoarding cash like they were a few years ago.
It's a well established fact (Score:2, Insightful)
The Republican party has repeatedly tried to shut down the US government when there is a Democrat in the White House. Doing so would trigger a depression. They are doing this hoping you're a low information voter who will blame the "party in charge". It didn't work this year because they have a very slim margin and because the chaos around their Speaker of the House highlighted their disfunction. But they still tried to crash the economy.
Meanwhile Economis
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that the economy does better under Democrats [wikipedia.org]
That's right folks ... don't believe your lying eyes! Carter, Obama, and Biden - economic powerhouses!
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Not quite: In the 1970s, the USA was faltering: Reagan appeared and made the difficult choices. He didn't do a great job but it was enough to create an economic boom. Now every political party wanted a Reagan-lookalike. Bush Senior got the job but wasn't it, so he was dismissed by his own party. Clinton got the job instead but most of his policies were Republican-party clones. However, this Reagan-lite wasn't a true believer so the true-believers decided, if you can't beat them, tell everyone else to
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Watching lefties and righties insult each other all day long just makes me want to vote for someone else. Well shit, now that Disney has gone full evil, I can't write in Mickey Mouse any longer.
Re:There's more competition with clothing (Score:5, Insightful)
rsilvergun, isn't smart. If he was he'd realize that the populist wing of the GOP (lead by Trump currently) is actually the best bet here.
Trump is the best hope? The guy who blew up our national debt with a big fat tax cut to the wealthy (who were already obscenely wealthy by historic standards and already at historically low tax rates) during a period where he claimed the economy was doing great no less, sees the needs of the people as more important than the needs of the affluent? I doubt it.
In fact, the only times I've ever heard him talk about monopoly busting is when a large company has pissed him off for issues completely unrelated to their size like being "woke". Unless it gets him revenge for something Trump has zero interest in trust busting as far as I've ever seen.
Re: There's more competition with clothing (Score:2)
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Nobody complains about Kohls because nobody shops there anymore. Well I do, but like once a year when my Wranglers get too dirty for office work and I need a new pair.
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Grocery prices change weekly, having digital signs make sense. When lumber and building supply prices were moving like the stock market during the pandemic home depot switched to digital price signs. Can't remember if
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That's because the only reason to go to Kohl's is to return shit you bought from Amazon.
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