Assisted by AI, could grocery stores start setting prices based on the weather, time of day, or how much product remains in stock? Could they tailor the price you pay to what they think they know about your income or shopping history?
Not in Portland, if City Council ends up passing an ordinance sponsored by District 4 Councilor Eric Zimmerman.
The council’s City Life Committee is set to hold a first hearing on the ordinance Sept. 22.
Consumers have become familiar with so-called dynamic pricing in which prices vary widely for the same service. Airlines or ride-share companies like Uber can change prices by the minute as supply shrinks or demand jumps. Up to now, such fast-changing price strategies have been impractical in grocery stores because workers would have to swap in new stickers for every price change. But new electronic shelf labels — which enable prices to be changed remotely — could change that. Electronic shelf labels are already in use on some Portland-area Whole Foods and Walmart shelves.
A Sept. 8 report by the AFL-CIO Tech Institute lays out what could be on the horizon. Makers of electronic shelf labels are already suggesting that retailers could use them to raise prices during peak shopping times. Prices could also be raised based on external factors, like hiking the price of allergy medications when pollen levels rise.
Zimmerman said he first heard about the issue from United Food and Commercial Workers Local 555. He then asked the Northwest Grocery Retail Association for input. Under Zimmerman’s proposed ordinance, retailers and third-party delivery services like Instacart would be barred from changing prices for any product more than once per day. They’d also be prohibited from using personal data about a specific customer to set prices, except for discount and loyalty programs in which they offer lower prices to seniors, veterans, loyalty card holders, and others.
Instacart has already been caught doing that: An investigation last year by Consumer Reports found that prices for identical grocery items differed as much as 23% from one Instacart customer to the next. After Consumer Reports published those findings in December, Instacart said it would halt the practice. Zimmerman’s ordinance would make such personalized pricing illegal in Portland.
“This is about fairness,” Zimmerman told the Labor Press. “There’s an ick factor that I think we all would understand — if we get to a world where technology can change prices for us when we’re at the grocery store based on us and not on the market, that is a little scary.”
Around the nation
In April, Maryland became the first in the nation to restrict “surveillance pricing.” Its new law, which takes effect Oct. 1, bars grocery stores from using personal data to set prices for specific shoppers. Similar laws have also passed in Connecticut and New Jersey. The New Jersey law also imposes a one-year moratorium on the installation of new electronic shelf labels while the state studies their effects.
