Two U.S. senators are raising alarms about grocery chain Kroger’s artificial intelligence-driven “dynamic pricing” model. Senators Warren of Mas

'Dynamic Pricing' at Major Grocery Chain Can Vary Prices Depending on Your Income | The New York Sun

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2024-08-14 12:00:08

Two U.S. senators are raising alarms about grocery chain Kroger’s artificial intelligence-driven “dynamic pricing” model.

Senators Warren of Massachusetts and Casey of Pennsylvania, both Democrats, say the initiative, which Kroger presented as a way to enhance customer experience, might exemplify unchecked corporate greed.

In a letter addressed to Kroger’s CEO, Rodney McMullen, the senators expressed concerns about potential privacy violations and the risk of increased inequality. The concern is that the grocery chain’s collaboration with an AI firm, IntelligenceNode, could result in customers incurring higher costs based on personal data used to gauge their purchasing thresholds.

Since its introduction in 2018, Kroger’s dynamic pricing strategy has expanded to 500 of its nearly 3,000 stores. This includes a partnership with Microsoft to develop the Enhanced Display for Grocery Environment, a digital shelving label system. The technology allows employees to adjust prices with ease, adapting to factors such as time of day and demand — and sometimes even a shopper’s personal info, like preferences and income.

“The EDGE Shelf helps Kroger gather and exploit sensitive consumer data,” the senators wrote. “Through a partnership with Microsoft, Kroger plans to 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.”