Democratic Congresswoman Rashida Tlaib recently addressed Kroger in a letter concerning the company’s reported plan to implement digital price tags, which could adjust prices instantaneously based on various factors such as time of day and weather. A particularly controversial aspect of Kroger’s proposal is the use of cameras in stores for facial recognition purposes.
Reports emerged during the summer indicating that Kroger, in collaboration with Microsoft, planned to utilize electronic shelf labels (ESLs) as part of an artificial intelligence initiative aimed at establishing dynamic pricing within its grocery outlets. This initiative also includes Enhanced Display for Grocery Environment (EDGE) shelf displays that allegedly feature cameras designed to collect customer information, including facial images, to enhance advertisement personalization.
Tlaib, representing Michigan, which has 120 Kroger locations, raised concerns regarding these technologies in a letter dated October 11, which she publicly shared for the first time on Tuesday. In her communication, she highlighted studies indicating that facial recognition technology has inherent flaws and could contribute to discrimination in predominantly Black and brown communities, emphasizing that these biases should not permeate grocery stores.
As the largest grocery chain in the U.S. by revenue, Kroger, which owns brands such as Ralphs, Fred Meyer, and Food 4 Less, faces scrutiny over the potential of ESLs to enable the creation of personalized customer profiles. Tlaib expressed worry that such profiling could lead to determining the highest price customers are willing to pay for goods.
This concept of dynamic pricing and individualized advertising has drawn parallels to the 2002 sci-fi film Minority Report, where targeted advertising is depicted as invasive. Kroger issued a statement to Gizmodo on Wednesday asserting that its business model is founded on reducing prices to attract more customers, noting increased shopping activity as evidence of their commitment to combating inflation and providing value. The company contested claims that ESLs would facilitate price hikes, stating unequivocally that it does not and has never engaged in surge pricing and emphasizing that any trial of electronic shelf tags aims to reduce prices.
Concerns about facial recognition have previously been raised by Senators Elizabeth Warren and Bob Casey, who, in August, questioned Kroger’s plans in a letter. They warned that facial recognition could be used to exploit sensitive customer data and that dynamic pricing could lead to strategic pricing akin to airline ticket sales, introducing unnecessary urgency and scarcity.
Kroger is also under intense examination due to its $24.6 billion merger with Albertson’s, a deal currently under review in state courts in Washington and Colorado due to antitrust concerns. Two Kroger executives recently testified in Denver District Court, arguing the merger is essential for competing with Walmart’s grocery sector. Furthermore, the Federal Trade Commission (FTC) has contested the merger, citing potential reductions in competition and price increases for consumers.