r/OutOfTheLoop • u/PrimateIntellectus • Aug 14 '24
Megathread What’s going on with Kroger’s dynamic pricing?
What’s going on with Kroger’s dynamic pricing that Congress is investigating?
I keep seeing articles about Kroger using dynamic/surge pricing to change product prices depending on certain times of day, weather, and even who the shopper is that’s buying it. This is a hot topic in congress right now.
My question - I can’t find too much specific detail about this. Is this happening at all Kroger stores? Is this a pilot at select stores? Does anyone know the affected stores?
I will never spend a single dollar at Kroger ever again if this is true. Government needs to reign in this unchecked capitalism.
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u/gothiclg Aug 14 '24
Answer: some places like McDonald’s and Wendy’s are trying this already with mixed success. Places like Kroger are likely eyeballing this because it has the potential to increase their profits. Grocery chains doing this is a bigger deal than fast food doing it because many of the things on the grocery stores shelves are necessities that many families can’t afford to pay extra for. Congress is also paying special attention to this because there are laws against driving up prices during certain times which may be violated by dynamic pricing in grocery stores.
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u/PrimateIntellectus Aug 14 '24
What is the rationale for dynamic pricing at a grocery store, aside from profit? For example, peak or off peak pricing for public transportation makes sense since there is limited seating. For Uber, there is a finite number of ubers on the road so supply and demand dictates that prices will increase if you want a car between 4-6pm.
For a grocery store, they have inventory in the back. I fail to see any reasonable rationale for dynamic pricing at a grocery store. Is the goal for grocery chains to carry less inventory (thus reducing spoilage) and then charge price based on that?
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u/Yevon Aug 14 '24
Since no one else gave you any answers that weren't "companies are greedy", here is a Planet Money episode about groceries that do this in Europe.
Some examples of dynamic prices from this business:
Prices during the day never go up, only down. Prices can go up between days.
Prices go down based on scouts they send to competitors to find out their competitors prices.
Prices go down based on expiration dates (e.g. milk that expires this week is cheaper than milk that expires next week)
You can learn more about why this might be a good idea for a business like a grocer here: https://www.npr.org/2024/03/06/1197958433/dynamic-pricing-grocery-supermarkets
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u/dlamsanson Aug 15 '24
If prices cannot go up, that is significantly different than what's being discussed in this thread. That's basically just regulated deals...
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u/Gahrilla Aug 15 '24
The sad fact is that in America, the prices will never willingly go down. They will either remain where they are currently or slowly creep up, sometimes rapidly jumping up in price depending on the demand.
In America, the opposite of Europe is what will happen if the government doesn't stomp this out of existence or regulate it out of favor.
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u/unite-or-perish Aug 15 '24
It's naive to imagine American companies would introduce dynamic pricing so they can give us flash discounts.
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u/bloodsplinter Aug 15 '24
I can assure you, all the corpo twat in the US will find a way to abuse this system, as they already did to all others, just to line up their pockets
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u/revets Aug 14 '24
In theory, a store could be a discount grocery at off peak times while charging a premium at peak times. And increase total volume of goods sold while maintaining a healthy margin needed for the store's overall operations.
Is that what's happening? Maybe, maybe not.
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u/PrimateIntellectus Aug 14 '24
I believe so. End result is the consumer gets screwed, this would punish those who work 9-5 and can’t grocery shop during off peak times. Pasting my comment on a different response as it’s applicable and is my best understanding.
The economic problem with this is that it passes the burden/risk of forecasting inventory levels from the store to the consumer. The grocery store can never 100% accurately forecast its inventory need and this results in efficiencies ($, time, spoilage). This dynamic pricing bullshit allows the grocery store to not have to deal with this risk, and forces to consumer to handle the burden by paying varying prices to make up the gap.
Somewhat related, like tipping. Instead of the business paying a proper wage, the burden is now on the public to help out the company by paying its employees. The only benefit is to the company who now needs to spend less money.
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u/TheKnitpicker Aug 14 '24
passes the burden/risk of forecasting inventory levels from the store to the consumer
I don’t understand how the customer is taking on the burden of forecasting inventory levels at all. What do you mean?
I also don’t see how the store is passing on the risk either. A hypothetical dynamically priced grocery store still has to carry more popsicles in summer than winter. And even if the store hikes the price up during a heat wave, it also will always make more money if it stocks enough popsicles to fully meet demand, rather than understocking, and will lose money if it overstocks.
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Aug 14 '24
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u/PrimateIntellectus Aug 14 '24
This makes sense, thanks for sharing. The economic problem with this is that it passes the burden/risk of forecasting inventory levels from the store to the consumer. The grocery store can never 100% accurately forecast its inventory need and this results in efficiencies ($, time). This dynamic pricing bullshit allows the grocery store to not have to deal with this risk, and forces to consumer to handle the burden by paying varying prices to make up the gap.
Somewhat related, like tipping. Instead of the business paying a proper wage, the burden is now on the public to help out the company by paying its employees. The only benefit is to the company who now needs to spend less money.
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u/Gawd_Awful Aug 14 '24
Order to shelf has never been about how feasible it is to store items in the back. It is an industry wide practice to reduce money spent by ordering too much and sitting on stock that may not move in time. Doing 5 orders a week for something that sells 5 times a week is cheaper than ordering 20 at once and not selling all of it right away. Plenty of stores have the capacity to store product in the back but still use order to shelf for inventory management
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Aug 14 '24
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u/PrimateIntellectus Aug 14 '24
I get your point, maybe I’m nitpicking…but in this case, demand falls because less consumers will be willing to pay $5 vs $2. I guess this is where the dynamic pricing comes in…Kroger will know who is willing to pay $5 and who’s max price sensitivity is $2, and charge those two consumers accordingly.
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u/lucyfell Aug 14 '24
Profit. That’s it. The store can argue it’s about stock and managing availability but the answer is profit.
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u/cjog210 Aug 14 '24
I'm gonna get downvoted but there's potential upsides to dynamic pricing that no one here is considering. If they overstocked an item and it's not selling, then dynamic pricing can reduce the price quicker and drive up demand so there's less spoilage and customers get food cheaper. Selling for dirt cheap is better than not selling at all (don't have to deal with disposal costs).
If they're solely using it to surge prices, then it's unethical. But I suspect they're planning to use it to raise some prices and lower others to better match supply to demand and reduce spoilage.
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u/PrimateIntellectus Aug 14 '24
Yes, this is an upside, akin to BOGOs or clearance in the current day. My economic rebuttal would be that this passes the burden/risk of forecasting inventory levels from the store to the consumer. The grocery store can never 100% accurately forecast its inventory need and this results in efficiencies ($, time). This dynamic pricing allows the grocery store to not have to deal with this risk, and forces to consumer to handle the burden by paying varying prices to make up the gap. It allows the business to get lazier since they know the consumer will make up shortfalls.
What I see as the really unethical part is if they use an individuals purchasing history to charge them different prices, that’s what the article sounded like. If it’s for inventory, fine. But if you charge different prices for the same product at the same time to different consumers, that’s F’d up.
Somewhat related, like tipping. Instead of the business paying a proper wage, the burden is now on the public to help out the company by paying its employees. The only benefit is to the company who now needs to spend less money.
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u/_Dreamer_Deceiver_ Aug 15 '24
They will claim things like they can "make food cheaper for those in need by having the more well off subsidise it" and "something something reduce food waste" and "something something supply lines" but definitely not "something something we want more money"
Who knows
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Aug 15 '24
My best guess is that they want to incentivize non peak hours with lower prices.
Regarding inventory, grocery stores work really hard to keep backstock to minimum. Backstock is wasted money, and paying employees to move product around is wasted time.
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u/Tebwolf359 Aug 15 '24
Devils advocate- to be clear I don’t trust them to do it well, but there are some methods that can be done:
a small discount during off peak hours. If you have to staff for the rush, there’s an overlap on hours. Give some early bird discounts to move the seniors and other groups with fungible times to different hours.
we already have dynamic pricing on a lot of hot foods. As soon as the deli closes it’s packaged and cheaper than when it’s kept in the deli.
bakery items, like donuts could get cheaper thru the day
A lot depends on the area you live in. I grew up in SW Florida, and it was very much a retirement area.
If a store had adopted this and successfully managed to shift 10-20% of the retireee traffic to not be right when people got out of work it would have been amazing.
We see this dynamic in restaurants already that offer early bird pricing.
Again, I don’t trust them, but I can see some good-neutral uses of the ability
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u/donjulioanejo Aug 14 '24
What is the rationale for dynamic pricing at a grocery store, aside from profit?
"Is that not enough motivation?" - Kroger CEO, probably.
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Aug 14 '24
It absolutely will drive the families at the bottom to food banks, if there are any available. It's unconscionable to do this with food staples.
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u/sylvnal Aug 14 '24
Food banks are already empty a lot of the time since inflation took off. I don't think they can absorb more people needing them.
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u/SunnyAlwaysDaze Aug 15 '24
I kind of can't believe the naivete of people down the thread that are saying food banks are going to be full of high quality food for folks. In Michigan where I live, the thumb regional food pantry just shut down. Too much need, not enough donations. This will be happening everywhere, sooner or later. Our elderly neighbor dude who used to serve in the military depended on the food bank for his meals. Now the neighbors got to come together and buy a couple extra things each grocery run so we can help him eat.
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Aug 15 '24
Now the neighbors got to come together and buy a couple extra things each grocery run so we can help him eat.
Bless you folks for coming together for him!
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u/MuddieMaeSuggins Aug 15 '24
And it’s hard enough to find food assistance, even harder often to find other staples that people buy at the grocery store - diapers, toilet paper, and what have you.
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u/Zodimized Aug 14 '24
Food banks are already empty a lot of the time since
inflationcorporate greed took off.46
u/kurokeh Aug 14 '24
Food banks are already empty a lot of the time since
inflationcorporate greedthey figured out how to market price hikes as inflation5
Aug 15 '24
but think about the shareholders' ability to feed their grandchildren meat in a future world where everybody is starving to death!
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u/MettaToYourFurBabies Aug 15 '24
Where's your American spirit? Did you never see the old movie Soylent Green? /s
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u/doolyd Aug 17 '24
I've volunteered at the local food bank a few times over the years and they have always been packed full. Just volunteered earlier this year and it was packed full as well. This is just anecdotal for my area but it was far from empty. I guess if you live in area that is largely struggling then there is less ability to donate to food banks therefore they would be more likely empty. Like I said, not the case with my area thankfully,
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u/wienercat Aug 14 '24
It's ridiculous that it's happening with food at all. The fact that anyone in the USA goes hungry or homeless is abhorrent... we are the wealthiest nation on the planet, but we can't feed and house our citizens, two of the basic necessities for survival? are you fucking kidding me?
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u/ZombieFeedback Aug 15 '24
"The works of the roots of the vines, of the trees, must be destroyed to keep up the price, and this is the saddest, bitterest thing of all. Carloads of oranges dumped on the ground. The people came for miles to take the fruit, but this could not be. How would they buy oranges at twenty cents a dozen if they could drive out and pick them up? And men with hoses squirt kerosene on the oranges, and they are angry at the crime, angry at the people who have come to take the fruit. A million people hungry, needing the fruit- and kerosene sprayed over the golden mountains. And the smell of rot fills the country. Burn coffee for fuel in the ships. Burn corn to keep warm, it makes a hot fire. Dump potatoes in the rivers and place guards along the banks to keep the hungry people from fishing them out. Slaughter the pigs and bury them, and let the putrescence drip down into the earth."
"There is a crime here that goes beyond denunciation. There is a sorrow here that weeping cannot symbolize. There is a failure here that topples all our success. The fertile earth, the straight tree rows, the sturdy trunks, and the ripe fruit. And children dying of pellagra must die because a profit cannot be taken from an orange. And coroners must fill in the certificate- died of malnutrition- because the food must rot, must be forced to rot. The people come with nets to fish for potatoes in the river, and the guards hold them back; they come in rattling cars to get the dumped oranges, but the kerosene is sprayed. And they stand still and watch the potatoes float by, listen to the screaming pigs being killed in a ditch and covered with quick-lime, watch the mountains of oranges slop down to a putrefying ooze; and in the eyes of the people there is the failure; and in the eyes of the hungry there is a growing wrath. In the souls of the people the grapes of wrath are filling and growing heavy, growing heavy for the vintage."
John Steinbeck, The Grapes of Wrath
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u/frostysauce Aug 15 '24
In 2021 the UN voted to make food a human right. Only two countries voted against it: the US and Israel.
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u/sw00pr Aug 14 '24
It would require the people at top to realize "the economy" should not be society's sole focus.
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Sep 10 '24
Yes, we can. It’s just that we’re sending all our taxpayer $$$ to fund a genocide against poor brown people instead of giving the money to our own citizens. It’s absolutely unacceptable.
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u/2FistsInMyBHole Aug 14 '24
we can't feed and house our citizens, two of the basic necessities for survival?
We can; we don't. It's not "our" job to feed and house them.
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u/wienercat Aug 14 '24
It is when those things result in increased crime, property damage, increased drug abuse, or any other number of resulting problems that come from hunger and poverty. Fact is homelessness and food insecurity is the job of a society to eliminate. Those two issues cause significant further issues downstream.
Idc what people say. It is the job of a society, and thus it's governing bodies, to ensure that all citizens are receiving the basic necessities for survival, or to enable them to seek those things out for themselves using the natural resources and land around.
But just recently, the supreme court just said it's totally fine to make being homeless illegal.
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u/Petro1313 Aug 14 '24
And I'm sure I could be wrong, but I feel like when it's not busy, they sure as hell won't be pricing things cheaper than base price.
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u/uristmcderp Aug 15 '24
That's how it should work, since store management would also prefer a steady flow of customers. But that's only going to help people who have the luxury of a flexible working schedule.
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u/sedition Aug 14 '24
It's unconscionable that any society with the capacity to feed and provide for its citizens basic needs is actively choosing not to do so. Adding insult to injury, this choice is being made so that wealthy people can accumulate more unneeded wealth.
I'm not some raging anarchocommusocialist or whatever.. but that's so fucked up at a fundamental level.
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u/garvisgarvis Aug 15 '24
so that wealthy people can accumulate more unneeded wealth.
Something has to fill that hole, that feeling of emptiness that they're not good enough.
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u/succsuccboi Aug 14 '24
yep, the busy grocery store hours are when working people are off work, not when the stay at home middle class moms can go shopping during the day.
No shade to sahms but these changes will almost certainly affect poorer americans more heavily
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u/unnewl Aug 15 '24
People work all hours of the day. No shade to you, but you would have been more accurate in saying first shift workers would be more affected.
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u/succsuccboi Aug 17 '24
no shade, but generally unless someone says "absolutely every person in a group" they don't mean "absolutely every person in a group."
yes, people work all hours of the day. The most common grocery store hours are on saturdays. some people work saturdays. some do not.
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u/Suckerforcats Aug 14 '24
Not everyone can go to a food bank either. In my area, you have to be on food stamps to go to the food bank. When I was unemployed years ago, my unemployment check was a bit too high to qualify for food stamps. When I contacted the food bank, they said I wasn't eligible because I had to already be on food stamps. I was SOL.
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u/Cybertronian10 Aug 14 '24
Almost like making a necessary ingredient for life a commodity bought and sold at a profit introduces perverse incentives.
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u/aqqalachia Aug 14 '24
and food banks are not as good as i think people often think. if you have a common food allergy, good luck. the food bank my family tried to use growing up, the only one nearby, gave you a half-gallon of milk, a box of cereal, a box of saltines, a bag of macaroni noodles, and i think that was literally it. sometimes a second box of cereal.
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u/qolace Aug 14 '24
Food banks are much better than the ones you grew up with. Which who knows how long ago that was. Nothing fancy still of course but don't share outdated information please. I encourage everyone who is in need to check out their local food bank.
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u/metalflygon08 Aug 14 '24
We used one growing up but it was church operated one and thus you had to be a member and get written permission from the bishop to get food from there (with some of the requirements being things like "full tithe payer").
I fear that dynamic pricing is just another step to give churches more power. Churches run food banks, they deny access to non tithed members, people join church so their families don't starve, church gets money and members.
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u/BroughtBagLunchSmart Aug 14 '24
And since a lot of them are run by the church they can legally discriminate.
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u/ResurgentClusterfuck Aug 14 '24
Yeah I went to one when I was younger that would only give if you attended services regularly (this is somewhat understandable)
Another grilled you for an hour about things like "how are you doing laundry"?
Then there was the largest Baptist church in town who told me if I wasn't a little tramp and kept my legs closed I wouldn't need propane to keep my infant from freezing (I was 16, thanks a lot church lady)
I avoid faith based services because of shit like this
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u/horseydeucey Aug 14 '24
I live in one of the most affluent counties in the country, and the lines of cars when food is distributed at food bank events is alarming.
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u/Critical_Seat_1907 Aug 14 '24
there are laws against driving up prices during certain times which may be violated by dynamic pricing in grocery stores
The whole point of dynamic pricing is to drive up prices during peak demand. That's its sole reason for existence.
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u/Ill-Common4822 Aug 15 '24
That's correct!
It's a weird concept though. With fast food, I get it. Imagine putting a $1 avocado in your cart and 20min later it's $3 at checkout. This doesn't seem legalndue to the time lapse and the buyer not knowing the price until checkout. Meaning the price is X but then can be Y 20 min later, but you intended to purchase it at X price. You would have to self scan while shopping. It actually works out pretty well at Sam's club.
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u/evilantnie Aug 18 '24
The tech being discussed would have dynamic price displays on each item, so what you see at the time you put it in your basket is the price you pay at checkout. The tech behind this is similar to Amazon Go using cameras and facial recognition from Microsoft.
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u/lunk Aug 14 '24
Meanwhile, they are telling shareholders that it will INCREASE PROFITS, while telling the public it will decrease prices.
Two-faced talk always means lies.
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u/YippysKid Aug 15 '24
When in doubt, remember that everything they say to a shareholder is is legally actionable, as shareholders make investment decisions based on their statements.
So, it will increase profits.
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u/notproudortired Aug 15 '24
I.e., lies to consumers, to whom the store has no fiscal accountability.
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u/KinkyPaddling Aug 14 '24
But just wait for WSJ to once again release an article blaming inflation on the Covid relief checks from 2021.
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u/Grapplebadger10P Aug 14 '24
It lost them this guy as a customer for sure. Sent a letter to corporate about it. All I can really do but fuck them.
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u/Gadget-NewRoss Aug 14 '24
Its a straight up violation of the law if they introduce dynamic pricing
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u/the4thbelcherchild Aug 14 '24
Why? What makes it illegal to set prices higher from 4-6pm on weekdays (for example)?
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u/Fakecanada Aug 14 '24
In krogers case there's already concerns by the DOJ that they're a monopoly (hence the issues with its recent acquisition attempts), so any kind of activity to use surge pricing will likely result in a violation of antitrust laws/the Sherman Act.
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u/stevenette Aug 14 '24
Its like after 9/11 a shit ton of gas stations bumped the price per gallon to like $30 or something. That is fucked up. They all got sued I am pretty sure.
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u/CrustOfSalt Aug 14 '24
Because it's predatory. Obviously.
Why stop there though? Why not have your utility company jack up the cost of a kilowatt hour and a gallon of water during the summer and winter? Why not have your driver's license and other documentation cost more if you drive badly? Why not charge parents more to serve their kids in a public school district if the parents make more?
Life is expensive enough, and guns are surprisingly cheap - don't encourage the rich to fuck over the poor, my guy
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u/williamtowne Aug 15 '24
Yeah.... what law would that be?
Are you going to take happy hour away from me?
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u/Gadget-NewRoss Aug 15 '24
Lol you think dynamic price will lower the price below normal i only see it going up during peak hrs. The price displayed is the price you pay.
So i enter the shop at 5 before the dynamic pricing kicks in. I pick up an item for €4 by the time i finish my shop, the item is now €8, legally you can't change the prices on the fly. Also can you imagine the issues at the tills.
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u/SonOfJokeExplainer Aug 14 '24
It’s not at all, its literally just the effect of supply and demand being factored into the price in realtime
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u/Complete_Entry Aug 14 '24
I stopped shopping at Kohls when they added the LCD price tags.
They say it's to give customers deals, but it feels like the exact opposite. No one wants to be the guy who gets the ramped up pricing.
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u/AshamedClub Aug 14 '24
This will also likely lead to runaway price jacking that has happened in a lot of areas like housing/renting. It’s basically a way to price fix without explicitly price fixing. Apartment companies now use algorithms that do not take into account the general want to avoid evictions and promote the stability of tenancy that humans often do (I.e. a landlord working out a deal with tenants) and have replaced these negotiations with software that just sets a price that maximizes profits without any of that pesky consideration of the people living there. The real rub then becomes when the majority or even just a lot of places in the area all use these systems and they are pricing themselves relative to the surrounding area and ensure profit margins are maximized. These algorithms are then directly comparing with other places right around them and just stepping up the rents by crazy percentages each year because all the other properties using similar software will also do those larger rent hikes. With this, landlords (or now potentially Walmart and Kroger) don’t have to be directly colluding to price fix, they just need to let the machine spit out new higher numbers because the human cutoff of “this is unreasonable to ask for this price for housing/bread” will have been eliminated. People try to argue that it’s just supply and demand, but any aspect of reasonability and empathy is intentionally taken out so no one has to feel bad about posting the new prices. It’s just what the machine said! When all the housing prices rise to where people cant afford it people will do pretty close to anything to remain housed because of how much it sucks not having it. This isn’t helped by how we treat people who’ve lost stable housing. They will put bills on credit cards and overextend themselves until eventually the creeping of prices is too much. Then maybe eventually things will crash when too many people end up on the streets and prices will have to come down, but a lot of people are going to suffer or die as we wait for that. Doing this with food too will only speed along the process.
This moving into more necessities like groceries is a huge problem and should not be allowed. Although I bet the BEST we’ll get is a limitation of its implementation on certain foods like maybe stuff that already qualifies for EBT because “we can’t stop a company from making profits, that’s what they’re made to do” even though they already are raking in unreasonable profits hand over fist. A subset of people will be happy to allow prices to rise on anything deemed “luxury” because fuck the poor they don’t deserve anything I deem luxury. And all that red tape to make sure it’s not blocked on the wrong items will be more expensive for the average consumer than just not letting it exist to begin with.
I for one can’t wait for the YouTube lifestyle “hackers” who will be like “if you want bread you gotta go to the most western Kroger in your town at opening on Tuesday before the Wednesday climb, and if you need eggs make sure to hit up 24 hour Super Walmart at 11:30 on a new moon for eggy hour” it’s gonna be sick.
Obviously this is a bit of worst case scenario logic, but it’s definitely not out of the realm of possibility. No matter what, these systems mean higher prices for the goods people need. That’s is at the literal core of their design.
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u/BedrockFarmer Aug 14 '24
In the future, only upper middle class people will be able to afford milk sandwiches during an event.
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u/Gtyjrocks Aug 14 '24
Your point about it being a bigger deal than fast food is a good one. I didn’t really understand the anger at that one, because fast food is a luxury anyway, let them charge what they want.
Grocery stores are necessities to pretty much everyone and shouldn’t be able to gouge like this.
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u/dougmc Aug 14 '24
This is just capitalism doing what capitalism does.
And capitalism doesn't really care if it's a necessity rather than a luxury -- in fact, as far as capitalism is concerned that's better, because the demand is less affected by higher prices.
(Side note: it's easy to dismiss fast food as a luxury, but to many if they don't eat fast food they don't eat at all.)
So we can reign in capitalism to some degree and stop the worst abuses, but these are business regulations, and there is one primary political party that really doesn't like regulations on business and its voters keep voting for this party even if some of these regulations could make their lives better -- they're OK with deregulation affecting other people, but when it comes to them it's all "I never thought leopards would eat MY face!" if they're even that aware of it.
But we can't have too much regulation, because that's socialism, or worse ... fascism, communism, etc. /s
In any event, these companies need to be really careful with how they do this stuff -- it will be very unpopular with their customers if their customers figure out that it's costing them money, and the customers will move to other companies -- and the other companies will probably be doing the same thing, but will be hiding it better.
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u/Gtyjrocks Aug 14 '24
To clarify, I meant luxury in the economic sense, not in the colloquial sense.
Agreed though, this is something we would need to regulate against, I’m just not sure if the will is there. Any sort of regulation on anything is shot down, and the partial overturn of Chevron doesn’t help now that the executives can’t as easily create rules against this.
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u/TheGreatestLobotomy Aug 15 '24
Also when a drive thru does it it’s not hard at all to drive out if you don’t like the price and drive what, like an extra block or two to try another drive thru? They always build so close to each other and you’re already sitting in a running car so you have a lot more active participation in the exchange. But if you’re inside the grocery store and don’t like the prices you see, you don’t just get to drive past the menu sign, maybe you’re already half way through a grocery trip with a loaded cart and a pivotal item you are going to purchase is being gouged, or maybe a couple items you already have in your cart were more expensive than you’d have liked but since you’re already here you deal with it, but by the fourth or fifth item that is overpriced? Do you start putting items back (and surely in the wrong part of the market) or take the time to pullout entirely and what, drive to another grocery store who knows how far away? It just seems conceptually miserable
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u/PirateNinjaa Aug 14 '24
Grocery stores are necessities
Grocery stores sell a lot of shit that is hardly a necessity, like pre cut fruit and pre cooked meals and expensive shrimp and caviar and shit. They could surge that stuff and nobody would struggle feeding their families unless they are trying to live beyond their means.
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u/Arickm Aug 15 '24
How is that relevant? Does it say anywhere that this will only apply to non-essential or special items?
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u/Bodybraille Aug 15 '24
When is our Boston Tea Party? When do we step up and dismantle these companies? When does our civil war between consumer and corporation begin? This shit is getting out of control with no end in sight.
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u/tsukahara10 Aug 14 '24
I feel like dynamic pricing is just a fancy phrase for price gouging, and should be treated as such.
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u/Sir_Yacob Aug 14 '24
If they implement this shit we are agreeing to do a thing right?
No fucking universe we let this shit pop off for them successfully
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u/Up2Eleven Aug 14 '24
Any time people try to tell me about other countries being so scammy I tell them, "If you want to see endless scams, come to America!"
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u/parthian_shot Aug 14 '24
Dynamic pricing by itself isn't necessarily a bad thing, depending on how it's implemented. Happy Hour is an example. Dynamic pricing helps distribute demand more evenly throughout the day. Ideally, it would mean charging less during off-times. Does anyone know if that's what Wendy's and McDonald's are doing? Or are they only charging more?
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u/schmuckmulligan Aug 14 '24 edited Aug 14 '24
I don't have a problem with transparent, preannounced dynamic pricing (happy hour). If the "deal" is the same for all people and it's publicly advertised, no worries.
But data mining can make the actual implementation of this stuff pretty diabolical.
"Oh, our app is telling us that you're late coming home from work before you pick up your kids from practice, and you have no other options along your usual route. Everything is now twice as expensive."
Or even something like, "The data that we bought from third parties helped us figure out that you're price insensitive the week after your payday (which we also figured out). Pay up!"
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u/Stock-Enthusiasm1337 Aug 15 '24
Because they aren't advertising it.
If you are trying to distribute the demand you'd want your customers to know prices have changed and to come at that time.
If you aren't telling people until they have been in your drive thru for 5 minutes and get to the speakerbox it's because you know you have them stuck and they are going to pay the extra $4.
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u/ansy7373 Aug 14 '24
Also how are they changing the price of goods? Is at the register because legally they have to charge the price that’s advertised
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u/Arbiter_Electric Aug 15 '24
Feels like they already do this... My local smiths is so terrible with their pricing. I haven't been in over a year because of it, but every single time I went at least one product rang in at higher than advertised price. It was so bad that when I asked the cashier at the self checkout to fix it he didn't even bat an eye or ask for proof or anything, just immediately changed it. The last time I went I bought 3 items. 2/3 were more expensive than what the price tags were.
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u/Ear_Enthusiast Aug 14 '24
Congress is also paying special attention to this because there are laws against driving up prices during certain times which may be violated by dynamic pricing in grocery stores.
Then why is Uber allowed to do it?
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u/SonOfJokeExplainer Aug 14 '24
Wendy’s thought about trying this and almost immediately backed down and then offered $1 Doubles for a month to win back some of the business they lost over it.
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u/Bitter_Mongoose Aug 14 '24
FTC is currently investigating grocery store prices. They are very concerned that prices are 10% above current inflation rates.
Literal profiteering.
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u/mlorusso4 Aug 14 '24
Not to mention it opens up massive antitrust implications considering Kroger just bought another massive grocery chain Albertsons. Considering many areas only have one grocery store for miles, this risks legitimately starving whole communities
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u/Cobbil Aug 15 '24
As a long time Kroger employee, I'd like to add that Kroger tends to purchase or adopt failing practices and tech all the time, then force it onto us and get mad when its, well, fails.
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u/HipposAndBonobos Aug 15 '24
many of the things on the grocery stores shelves are necessities that many families can’t afford to pay extra for
Also, unlike fast food, grocery prices affect welfare programs
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u/sisyphus Aug 14 '24
Answer:
Senators just wrote a letter to the CEO asking questions. Companies have been doing profiling of customers since forever. What do you think loyalty cards, and cameras and free wifi in stores are for?
What Kroger would like to do however, is "Uber for Groceries" and to that end "the chain first introduced dynamic pricing in 2018 and expanded to 500 of its nearly 3,000 stores last year. The company has 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 prices in stores so that employees can change prices throughout the day with the click of a button."
So they would like to be able to respond throughout the day to surges in demand by raising prices; and are already implementing things to do so. What they would also like to but have not done yet is "place cameras at its digital displays, which will use facial recognition tools to determine the gender and age of a customer captured on camera and present them with personalized offers and advertisements on the EDGE Shelf"
So naturally the grocery store says this will 'enhance your shopping experience' when the shelf can say 'Hello Sisyphus! We have a great deal for you on olive oil, based on your shopping patterns we think you're getting low' and the Senators think that instead what will happen is that "EDGE will allow Kroger to use customer data to build personalized profiles of each customer... quickly updating and displaying the customer’s maximum willingness to pay on the digital price tag", ie. they know my grocery budget, zip code, age and ethnicity and therefore can guess how much money I have and do 'surge pricing' on individual items by adjusting the price to the upper limit of my tolerance.
What, if anything, the senators could do if the Kroger CEO says, 'yeah we're gonna do that. Free markets baby! Capitalism YAY! What are you, some kind of Commie?' is unclear.
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u/PrimateIntellectus Aug 14 '24
Great summary. This sounds really dangerous and really fucked up. Different consumers paying different prices for the same product based on their purchasing history.
I have zero faith or trust in a for-profit corporation to do the right thing for their consumers.
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u/BearWaver Aug 14 '24
Yep. Freaking terrifying. Imagine if shopping for groceries (or anything really) was like shopping for plane tickets, hotel rooms, concert tickets etc. No one knows what the market price is because it changes on a whim and people aren't seeing what other people are paying for the same product
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u/PrimateIntellectus Aug 14 '24
Yup, this is what late stage capitalism looks like. Profit at all cause and we are too far gone to stop it because those who make the laws to allow this also profit. The cycle continues until there is no middle class, just rich and poor.
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u/VaselineHabits Aug 14 '24
I never aim for a Revolution because I know it will cause alot of us pain - but there will be a breaking point if our government doesn't step in and restrain the corporations pulling this shit.
Not sure many could boycott a grocery store
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u/kadala-putt Aug 15 '24
Now realize that they are in the process of merging with Albertsons, the company that owns a bunch of grocery chains, most notably Safeway. This will create a defacto monopoly in many neighbourhoods as the only choice is between a Kroger outlet and an Albertsons outlet. The FTC is suing to stop it, but if Trump comes to power in January, that's not gonna happen anymore.
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u/BrushYourFeet Aug 14 '24
They've been doing this for years somewhere in Europe (or it could have been Japan, can't remember the video), which most people don't associate with capitalism.
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u/katchoo1 Aug 15 '24
And all the guides that are supposed to help you find the right price are consolidated into subsidiaries of the people fucking with your buying experience in the first place.
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u/ClearASF Aug 14 '24
What's the issue here? You said it already, you do it for plane tickets/hotel rooms etc.
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u/BearWaver Aug 14 '24
Well those are 3 things i hate shopping for and avoid doing whenever possible so if you are asking me specifically, my issue is i feel like I'm being scammed and i know I'm being scammed. i know the people around me are all paying different amounts for the same product which as a consumer i despise.
But lets play out your point of "you already do that sometimes so why not in this instance too?" Because it really is such a disastrous argument that it bears more thought. In the same way that we "already" buy things in the way we do plane tickets/concert tickets/hotels we all also pay for medical care only AFTER getting all of our service done, sometimes the bills continue for years. Why wouldn't you want that applied to the rest of the economy? You could go out for dinner, order what you think is in your budget then find out at the end this dinner will cost 10x what you expected. Then you could get more bills from the restaurant mailed to you for years with item lines like "second ramekin of remalude sauce -$300". "3rd jack and coke - $550" because they don't have to bill you all at once or even in a timely manner.
This form of pricing already exists and we deal with it constantly, what's the issue?
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u/ButtMassager Aug 14 '24
This is 100% already happening. Buy something on Amazon that has a coupon? You'll see more coupons. Things won't actually be cheaper, but they'll seem that way because coupon
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u/PrimateIntellectus Aug 14 '24
100% Agree, but this being applied to our food supply is really really really dangerous.
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u/GuyentificEnqueery Aug 14 '24
Idiocracy is becoming reality. At the very least I am looking forward to getting the Kirkland Signature housing.
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u/hell2pay Aug 14 '24 edited Sep 16 '25
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u/DreaminSpielberg Aug 21 '25
Well more escuse to just roll out of bed before shopping so I look like I can’t afford groceries hence I’ll get the real price of food VS the inflated price just bc I decided to do my hair, makeup and look nice
But world is getting super creepy like the ads are beyond control and so is the greed
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u/kurvyyn Aug 14 '24
Except this is kinda already a thing. Coupons allow a customer to self select into a different price segment. You deal hunt or you overpay. Why ever the fuck the price can’t just be the fucking price. Every day you dicker with an imaginary entity, and if you aren’t cataloguing print ads and/or letting them track your purchases, you are automatically losing the negotiation. I’m pissed off at Kroger’s BS here, but they’re building on rotten piles of shit that also deserve hate.
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u/bananabourbon Mar 04 '25
Yes! This is one of the reasons I actively shop at Aldi. However, Kroger could build this type of data on their shoppers from credit card related companies like Experian, which is exactly what Walmart did to build their retail media network (for ad targeting)
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u/filibuster93 Aug 14 '24
This may be a stupid question, but how would all that work when you swipe the barcode at the register. Like all olive oil would have the same barcode, so how would they do individual price hikes?
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u/mayhem1906 Aug 14 '24
Kroger has loyalty cards where you get a "discount". It would likely tie to your loyalty card or if you don't have one it defaults to the max, so you get a "discount" by using it. They would tell you "saved" 50 cents due to dynamic pricing and loyalty
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u/the_quark Aug 14 '24
Yeah every time I get my Safeway receipt with the big "you saved" at the bottom I always think to myself "Without this loyalty program, we would've marked the shelf price of these items $20 lower!"
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u/Infymus Aug 14 '24
Kroger's non loyalty card price is a ridiculous random number generator that can be as much as 5x the cost without the card. It's designed to force the card.
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u/MoBeeLex Aug 15 '24
As someone who used to work at a grocery store doing pricing, no, it wouldn't have. They just took stuff already designed to be that price due to sales or from some form of special pricing due to vendor contracts and just assigned it to their loyalty program.
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u/QuickBenjamin Aug 14 '24
Eh, a lot of the sales are legit at places like that, they just expect you to buy other stuff while you're there for the stuff on sale (and they're usually right)
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u/vonshiza Aug 14 '24
Same facial recognition software will be at the registers,so your "profile" will be loaded and your super duper special prices will be reflected there.
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u/space_for_username Aug 15 '24
We know what you earn - the price goes up to match it. Hungry at suppertime - the price just went up.
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u/LennyPayne Aug 14 '24
The prices would be updated in the system and most likely won't need any human approval for any changes. So the same barcode will could be priced differently in an instant.
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u/cwx149 Aug 14 '24
So what happens when customer A sees price A on the shelf and grabs the item and then wanders thru the store for another 45 minutes and it updates to price B I wonder.
Do they somehow guarantee that no one has it in their cart when the prices update? Or does customer A have to pay attention to make sure nothing has changed prices?
Stores already change prices over time but typically the label switching/sale signs all go up or down outside business hours
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u/andracowolf Aug 14 '24
it would be more like you pick up the item and the shelf shows one price but when you get to the register the price will be higher cause AI sees that multiple people are putting the item in their carts, or there have been a large number of sales in the last X min
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u/mackfactor Aug 17 '24
That's really not complicated. A lot of businesses already use some kind of dynamic pricing. If they can identify you - or any of your relevant pricing attributes - they can make algorithmic adjustments pretty easily. It's just like casinos - the house just needs enough of an edge and they'll use whatever edge they have.
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u/sisyphus Aug 14 '24
I don't know - they haven't actually done anything like it and it's all theoretical at this point. One hopes MS just promised it and wants to collect a lot of consulting fees before declaring failure.
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u/TACO503 Aug 14 '24
As someone with numerous food allergies this is terrifying. Any store will quickly dial in on my safe foods and that I will always pay for the food that won’t make me ill. Furthermore none of mine are on the major food allergen list so they’re not likely to be considered or protected. I already have a hard time eating out and now it’s going to be even more challenging and expensive just to eat. Yikes!
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u/SurprisedJerboa Aug 14 '24
Kohl's Electronic Price Tags have been around for a few years. They smartly do not have dynamic pricing.
Be glad the Dems are in charge of the Anti-Trust part of the Government right now
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u/Afraid_Reputation_51 Aug 14 '24
Yeah, companies like Staples, Best Buy, and a couple of others already got called out for it...between 2010 and 2012, can't remember exactly, when a consumer group did research on their online stores and realized the prices changed based on zip code. Obviously, they weren't lowering their prices for low income areas.
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u/Realtrain Aug 14 '24
What, if anything, the senators could do if the Kroger CEO says, 'yeah we're gonna do that. Free markets baby! Capitalism YAY! What are you, some kind of Commie?' is unclear.
I mean, the Senate can absolutely regulate that under the interstate commerce clause.
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u/sisyphus Aug 14 '24
Right, all the senators, I should have been more clear I meant the two senators who wrote the letter. Getting anything actually done in American national politics is a whole other thing though.
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u/ChaosCarlson Aug 15 '24
And how has regulating business for the protection of consumers been going in the US lately? Last I heard, both republicans and democrats want to defang the FTC even more than it already has. Can’t imagining that happening in Europe
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u/Onwisconsin42 Aug 14 '24
Well some simple legislation like companies who serve food or sell food are not allowed to collect or possess certain kinds of data. Or it could be legislation that requires food selling businesses to have a price set for the day which cannot be adjusted except at a certain time like 11pm to 1 am, this price must apply to all customers. Or something like that. I can think of a lot of ways to curtail the practice.
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u/t0rchic Aug 14 '24 edited Jan 30 '25
existence deliver flowery violet door society like correct wipe rob
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u/anonareyouokay Aug 14 '24
Watch them implement gait recognition and then we'll all have to do silly walks to avoid recognition.
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u/chibiusa40 Aug 14 '24
We're not going to solely mask up for COVID anymore.
Hey speak for yourself. I haven't had so much as a sniffle in 4+ years and I avert facial recognition as an added bonus. 11/10 would recommend.
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u/Sasselhoff Aug 14 '24
What do you think loyalty cards
This is why I just dump my loyalty card every so often and start again. I'm sure they're still following me in some other way, but I might as well try to frustrate their efforts.
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Aug 14 '24
You also have to tie in the fact that if every grocery in an area does this, it becomes collusion. The same thing that landlords across the nation have been doing
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u/ProfessorJV Aug 14 '24 edited Oct 04 '24
So it's just another opportunity for Microsoft to push Edge
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u/Sarothu Aug 14 '24
What, if anything, the senators could do if the Kroger CEO says, 'yeah we're gonna do that. Free markets baby! Capitalism YAY! What are you, some kind of Commie?' is unclear.
Wouldn't increasing pricing based on surging demand violate laws against price gouging?
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u/dualdreamer Aug 14 '24
They'll do the opposite. High base price and surge increase the discount. Same end price but technically not against the law
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u/paramapotomus Aug 15 '24
Answer: My completely uninformed experience tells me that this will either result in bunches of people standing near the product they want to buy until the price point reaches their desired expense threshold, or someone will figure out the algorithm and that will tell people the optimal time to purchase. Every action has a counter reaction. I'm not saying dynamic pricing will go away, but Kroeger and anyone else using it will need to refine it to make it a viable tool.
Deleted my original post because it didn't follow the rules.
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u/SnollyG Aug 15 '24 edited Aug 15 '24
Answer: I mean, in first year microeconomics, you learn about the concept of price discrimination (the ability to suss out how much every buyer is willing to pay). Think of it as custom prices for every buyer, set to the max that they’re willing to pay.
It’s like the Holy Grail of free market economics (for sellers/producers).
This is what dynamic pricing opens the door to.
Of course, this also results in impoverished consumers who must then open themselves to further exploitation in the job market (in order to maintain/increase personal income).
the life of man… solitary, poore, nasty, brutish, and short.
But all of this is ok if you’re the one doing the predation, because you got yours. So sad, too bad for everyone else.
These are the values our society of economy has endorsed. It’s why you can’t trust the business class, tech bros, republicans or centrists/neolibs/corporatists.
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u/ivanbin Aug 15 '24
It’s like the Holy Grail of free market economics (for sellers/producers).
And the holy grail of examples on why people who think free market works are idiots (not saying that's you OP, just in general)
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Aug 19 '24 edited Aug 19 '24
Answer: It’s very likely that any resturant or shop that has only digital menu or price labels will do this. Why would’t they? There are no laws aganist it.
Have you noticed that food ads seldom feature prices these days ? There are no pdf price llists for that reason.
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Aug 14 '24
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u/cragglerock93 Aug 14 '24
ESLs are a brilliant piece of technology and definitely do save labour and reduce errors. But the ability definitely is there to change prices several times a day and that's wrong I think. I hope the government would quite strictly regulate this if it ever became a thing in my own country. For things like fast food joints it'd be frustrating but ultimately avoidable. It has no place in grocery retail, though.
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