Congresswoman Tlaib Raises Concerns Over Kroger’s Use of Technology
Congresswoman Rashida Tlaib has expressed serious apprehensions regarding the implementation of technology in Kroger grocery stores, alleging that it may result in discriminatory pricing practices. In a letter distributed via social media on Wednesday, the Democrat from Michigan suggested that the Cincinnati-based grocery giant could potentially exploit electronic shelving labels to unjustly increase prices in times of crisis.
“The use of ESLs, or digital price tags, by Kroger can lead to dynamic pricing for products, which might result in higher prices for essential items based on prevailing conditions and stock levels, thus causing confusion and hardship among my constituents,” the letter stated. “My worry is that these tools may be manipulated in the quest for profit, causing prices of essential goods to surge in areas facing a dwindling number of grocery stores.”
Concerns Over Facial Recognition
Tlaib further articulated concerns that facial recognition software in these stores might enable Kroger to compile consumer profiles and adjust pricing according to the information collected. “Facial recognition tools pose a potential threat to customer privacy and could be used to apply biased price discrimination,” the letter mentioned.
Families are finding it increasingly difficult to afford basic groceries. Consequently, I have addressed my concerns to @Kroger regarding their intention to implement surge pricing with the aid of facial recognition technology. This technology often results in discrimination and is inappropriate for use in supermarkets for exploiting consumers.
— Congresswoman Rashida Tlaib (@RepRashida) October 15, 2024
Kroger’s Response
Kroger, in response to these claims, denied any engagement in such practices and affirmed that the technology aims to reduce costs for consumers. In a statement to USA TODAY, they clarified, “To set the record straight, Kroger has never participated in ‘surge pricing.’ The trial of electronic shelf tags seeks to lower prices for a vast number of customers where it is most crucial. Any suggestion to the contrary is unfounded.”
Tlaib’s team did not give immediate comments on further inquiries. The Congresswoman has requested a response from Kroger by November 1.
Echoing Broader Political Concerns
Tlaib’s concerns align with those expressed by Democratic Senators Elizabeth Warren and Bob Casey, who earlier communicated with Kroger in August. They expressed apprehension that the “widespread application of digital price tags seems set to enable major grocery chains to widen their profit margins at the expense of consumers.”
“Experts have predicted that the extensive use of dynamic pricing will result in groceries and other consumer essentials being ‘priced similarly to airline tickets,'” they wrote.
In 2018, Kroger introduced these digital price tags, labeled as Kroger Edge. Bilal Baydoun, the Director of Policy and Research for Groundwork Collaborative, testified before the Senate Banking Committee in March, warning that such technology could be deployed to “gauge the extent of price hikes each of us can endure.”
Context of Merger Talks
The Congresswoman’s letter comes amid ongoing discussions of a potential merger between Kroger and another significant grocery corporation, Albertsons. Court hearings regarding the Federal Trade Commission’s attempt to prevent the proposed $25 billion merger concluded in September. The commission’s lawyers maintained that the merger would reduce competition, inflate consumer prices, and result in job cuts.
FTC attorney Susan Musser emphasized, “Consumers rely on competition. Basic logic shows that these (non-supermarket alternatives) are not adequate replacements for supermarkets.”
The court has not yet adjudicated the issue. Executives from Kroger and Albertsons testified in a Denver district court on Monday, asserting that the merger was crucial for competing with large-scale retailers such as Walmart and Costco, as reported by the Denver Post. Colorado is among the states seeking to block the merger.
“Our focus has intensely been set on Walmart and their pricing strategies. For two decades, we have aimed to align our pricing more closely with Walmart,” said Stuart Aitkin, Kroger’s Chief Merchandise and Marketing Officer, during the testimony.
The merger was disclosed in October 2022, but the Federal Trade Commission filed a lawsuit to halt the process in February. According to the U.S. Department of Agriculture, the merger would cover approximately 20% of the U.S. grocery sector and, if approved, could impact one in every six grocery employees, according to the Bureau of Labor Statistics.
Contributed by: Alexander Coolidge, Cincinnati Enquirer
This article originally appeared on USA TODAY: Lawmakers question whether Kroger using facial recognition for pricing