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Earlier this year, Wendy’s found itself the subject of widespread criticism when it announced that it was going to be testing out a “dynamic pricing” model, which basically meant they wanted to be able to change the price of their items based on the time of day and demand of the product. This is, of course, shameless price-gouging, and Wendy’s got dragged pretty hard for the idea. Senator Elizabeth Warren quickly called them out on their corporate greed and they quickly backtracked.
Protecting consumers and trying to stop corporate greed is one of Sen. Warren’s greatest passions. During the presidential primary in 2020, the woman had a lot of plans for that, and she hasn’t slowed down. Last week, she and Sen. Bob Casey announced that they have launched an investigation into the grocery chain Kroger to determine whether or not they are using surge-pricing. Kroger is one of several big retailers that use digital price tags (also known as “electronic shelving labels”) in order to “save labor costs” of changing paper price tags (aka they don’t want to pay someone to do it). Kroger uses it in approximately 500 of their US stores.
“These digital price tags may enable Kroger and other grocery chains to transition to ‘dynamic pricing,’ in which the price of basic household goods could surge based on the time of day, the weather, or other transitory events – allowing stores to calibrate price increases to extract maximum profits at a time when the amount of Americans’ income spent on food is at a 30-year high,” the lawmakers wrote in the letter, requesting additional information from the grocer on how it uses the technology.
Kroger officials said their strategy is to lower prices to attract customers, but they didn’t address specific questions about the use of the technology or how frequently they change prices.
“Kroger’s business model is to lower prices over time so that more customers shop with us,” Kroger spokeswoman Erin Rolfes told The Enquier. “Everything we do is designed to support this strategy, and customers are shopping more with Kroger now than ever because we are fighting inflation and providing great value. Any test of electronic shelf tags is to lower prices more for customers where it matters most. To suggest otherwise is not true.”
Nonetheless, the senators noted the expanded use of the technology and its potential for abuse. They noted Kroger uses the technology in about 500 stores nationwide. They also expressed concern for the grocer’s use of customer data.
“The increased use of dynamic pricing will drive company profits higher – leaving consumers with the bill,” wrote the lawmakers.
In addition to Kroger stores, the grocer operates several regional supermarket chains in 35 states, including Fred Meyer, Harris Teeter, Ralphs, Mariano’s, Fry’s, Smith’s, King Soopers, QFC and others. The company has more than 2,700 stores and employs almost 414,000 workers.
[From The Cincinnati Enquirer]
Thank you, senators. I have no doubt that Warren will not let up until she gets to the bottom of it and makes a public example of Kroger if they are, in fact, changing their prices. It sucks that right now, companies can do this and most consumers would be none the wiser. And they’re not the only industry that’s trying to pull unethical shenanigans at the expense of consumers. A scandal is brewing within the rental industry, where landlords are using software called RealPage that utilizes AI to price-fix, which eliminates competition and leaves renters paying higher prices. We know that the travel and hospitality industries already do surge-pricing and price-fixing. I’m certain that more are also doing things like this to f-ck over the little people. I hope they all get what’s coming to them.
In other news, the Biden administration continues to work for the people. On Monday, President Biden announced that they are working on finalizing three new rules. The first rule is a “Click to Cancel” rule that makes it easier for people to cancel memberships and subscriptions. The second rule aims to stop marketers from using fake reviews to bump up product ratings. Finally, the third rule proposes that customers be able to talk to real-live people with the press of a button, rather than going into that “doom loop” of getting bounced around to different menus and yelling “representative!!” 50 times before you (maybe) get to someone. These are all simple changes that will make life a little easier. It’s nice to have people who are finally fighting for us.
Kroger can kick rocks as far as I’m concerned. They bought the last remaining competitor here in my area. I feel like this is effective monopoly for mainstream grocery. We still have Vallarta, Trader Joes, and Whole Foods but those are all pretty much specialty grocery. It’s just me. I’m not going to Walmart or Costco either. I’m sure they can say that there is competition but just plain grocery Ralph’s (Kroger is it). I’m sure a trade attorney can tell me why Kroger is special, but I’m not seeing it.
We also need Katie Porter and her white board to rustle up the House with this data!
I’m forced against my will to be a ‘friendly Kroger shopper’ due to my unfortunate demographics.
Corrupt American businessmen learned they can overcharge until the cows come home after the pandemic/lock down forced citizens into a price gouging landscape.
If we manage to elect the right representatives come November, we can expect more of these initiatives.
But don’t tell the other side! They’ve long enjoyed voting against their interests! 🙄
The woman who created the CFPB is always looking out for us and honestly, shit like this is so broadly popular among American voters, I’m surprised more pols don’t make consumer protection their pet cause.
And we cannot forget what Biden did with the junk fees and cutting credit card late fees from $32 to $8. Now the Biden admin is cutting out unnecessarily complicated steps that companies force customers to go through to receive refunds, return items, or cancel subscriptions. To me, these are policies that have the optics of a small win but are actually a big win for those of us who just want a better, easier quality life and are sick of corporations taking advantage of us at every turn. I have no doubt that Warren’s influence is behind these recent consumer-based policy proposals as she’s had a prominent role on Biden’s advisory board.
Whole Foods (in Baton Rouge) has had electronic price tags for years. So sketchy. And rent stuff is so absurd. They just shrug their shoulders and say it’s the ‘market price’ as if they aren’t the ones setting the market.
I live on the west coast and Kroger is currently trying to buy Albertson’s/Safeway, accompanied by much bullshit about how this mega-merger will be great for consumers! Thank god the government is trying to stop them. I *really* hope it doesn’t go through. I try to avoid Fred Meyer if at all possible now, but cutting out Safeway would mean many fewer places to shop for groceries.
I’m on the west coast too, Oregon. I hope Wyden and others can stop this merger, it would mean a monopoly on the regular store, its ridiculous.
❤️