Dynamic grocery pricing arrives in Europe—and America could be next

Bad news for anyone trying to cut down on screen time: Electronic shelf labels, which enable instant price changes, have become popular overseas in recent years, and are now spreading to grocery stores across America.

Europe sets the table

Electronic shelf labels are common in grocery stores across Europe, giving retailers instant flexibility in regards to pricing. Most shifts are small cuts, though systems can also increase prices based on supply and demand.

• Norwegian discount chain REMA 1000—one of the country’s largest grocers—changes prices up to 100x/day, especially around holidays.
• In the Netherlands, supermarket giant Albert Heijn discounts items near expiration up to 4x/day, which the retailer says prevents 250,000 kilograms of food waste annually.

Retailers pitch the system as a win for costs and convenience: staff are freed from swapping thousands of paper tags, less waste is produced, and discounts can be rolled out instantly.

US grocers are following suit: While American retailers have offered electronic shelf labels for several years, plans for increased usage among grocery stores has drawn attention from lawmakers and analysts.

• Walmart, which currently has digital shelf labels in ~400 of its ~4,600 US stores, plans to increase that number to 2,300 stores by 2026.
• Kroger and Whole Foods Market are also expanding pilot programs that digitize store shelf labels.

But…Last year, Sens. Elizabeth Warren (D-MA) and Bob Casey (D-PA) sent a letter to Kroger raising concerns that its use of digital price tags could allow stores to participate in surge pricing, or increase the cost of goods at busy shopping times.

On the flip side: Grocery giants, including Kroger and Whole Foods, say they have no plans to use electronic tags for dynamic or surge pricing.

Big picture: Dynamic pricing is currently used in several US industries, including ride-sharing, live events/entertainment, air travel, and fast-food.