August 07, 2024

Warren, Casey Investigate Kroger’s Use of Digital Price Tags, Warn of Grocery Giant’s “Surge Pricing”  Causing Price Gouging and Hurting Consumers

“Widespread adoption of digital price tags appears poised to enable large grocery stores to squeeze consumers to increase profits.”

Text of Letter (PDF)

Washington, D.C. – Today, U.S. Senators Elizabeth Warren (D-Mass.) and Bob Casey (D-Pa.) sent a letter to Rodney McMullen, chairman and CEO of The Kroger Co. (Kroger), raising concerns about Kroger’s use of Electronic Shelving Labels (ESLs) to surge grocery prices and exploit consumers. 

ESLs are digital price tags that allow companies to engage in dynamic pricing, changing the prices of goods based on temporary factors such as the time of day or the weather. By updating price tags with the simple click of a button, corporations can price gouge, suddenly raising the consumer costs at times when certain products are in highest demand. 

Many grocery chains, including Kroger, have rapidly expanded their use of ESLs in recent years. Kroger began using the technology in 2018 and has since expanded it to 500 stores nationwide. ESLs may help Kroger extract maximum profits from consumers at a time when Americans are dealing with the cost of grocery prices: high grocery prices are a leading concern among Americans who are concerned about inflation.

“The increased use of dynamic pricing will drive company profits higher – leaving consumers with the bill,” wrote the lawmakers. 

Kroger’s ESL device, called the Enhanced Display for Grocery Environment (EDGE) shelf, was created through a partnership with Microsoft. It may enable Kroger to gather data on customers to determine how much price hiking they can tolerate and then present each customer with personalized price tags at the grocery shelf. 

“I am concerned about whether Kroger and Microsoft are adequately protecting consumers’ data, and that as Kroger expands the personalized customer experience, customers will ultimately be offered a worse deal,” wrote the lawmakers. 

The lawmakers requested that Kroger provide information about its usage of ESL platforms such as EDGE to conduct dynamic pricing and collect sensitive consumer data.  

Kroger is the largest supermarket operator in the United States, boasting over 400,000 employees and nearly 3,000 stores across the country. 

“It is outrageous that, as families continue to struggle to pay to put food on the table, grocery giants like Kroger continue to roll out surge pricing and other corporate profiteering schemes,” concluded the lawmakers.

As a champion for American consumers and a secure and healthy economy, Senator Warren has engaged in oversight of corporations for unfairly increasing prices for consumers. She has also been calling for more competition and stronger enforcement of antitrust laws to bring down prices for families: 

  • On May 13, 2024, Senator Warren and Rep. Jim McGovern led a group of lawmakers in a letter to President Joe Biden, urging the Biden administration to use its executive authority to take action to lower food prices. 
  • On May 3, 2024, during a hearing of the U.S. Senate Committee on Banking, Housing, & Urban Affairs, Senator Warren called out food industry price gouging and urged action to combat unfair pricing practices.
  • On April 17, 2024, Senator Warren (D-Mass.), Bob Casey (D-Penn.), and Ben Ray Luján (D-N.M.) wrote to DoorDash and UberEats, the two largest delivery platforms, calling out their use of hidden junk fees.
  • On March 28, 2024, Senator Elizabeth Warren (D-Mass.) and Representative Mary Gay Scanlon (D-Penn.) led a group of 14 lawmakers in a letter to FTC Chair Lina Khan urging the agency to revive enforcement of the Robinson-Patman Act (RPA), a critical tool to promote fair competition in the food industry. 
  • On February 28, 2024, Senator Warren joined Senator Bob Casey (D-Pa.) in introducing the Shrinkflation Prevention Act to crack down on corporations that deceive consumers by selling smaller sizes of their products without lowering prices.
  • On February 15, 2024, Senators Warren, Baldwin, Casey, and U.S. Representative Jan Schakowsky (D-Ill.) reintroduced the Price Gouging Prevention Act of 2024, which would protect consumers and prohibit corporate price gouging by authorizing the FTC and state attorneys general to enforce a federal ban against grossly excessive price increases.
  • In December 2023, Senator Warren urged the FTC to block the Kroger-Albertsons merger, which would give the five largest food retail companies control of 55 percent of all grocery sales, allowing them to further control and ultimately raise consumer prices, while also reducing job competition, decreasing wages, and decreasing the bargaining power of organized labor.
  • In November 2023, Senator Warren called out TransDigm for its refusal to provide cost and pricing information needed to prevent price gouging of taxpayers and the Department of Defense.
  • In the past few years, Senator Warren has urged the Biden administration to closely scrutinize other potentially anticompetitive mergers that could lead to higher prices for consumers and accelerate industry consolidation. She has led letters about the proposed mergers of Frontier and Spirit airlines, JetBlue and Spirit Airlines, Sanderson-Wayne, WarnerMedia-Discovery, and Amazon-MGM.
  • In March 2022, Senator Warren introduced the Prohibiting Anticompetitive Mergers Act to help stomp out rampant industry consolidation that allows companies to raise consumer prices and mistreat workers. The bill would ban the biggest, most anticompetitive mergers and give the Department of Justice and Federal Trade Commission the teeth to reject deals in the first instance without court orders and to break up harmful mergers.
  • In February 2022, at a hearing, Senator Warren called out corporations for abusing their market power to raise consumer prices and boost profits.
  • That same month, Senator Warren requested the Department of Justice to take aggressive action against corporations violating antitrust laws to hike prices for consumers.
  • In January 2022, Senator Warren questioned Federal Reserve nominee Lael Brainard about market concentration and price gouging driving inflation.
  • At a January 2022 hearing, Senator Warren pressed Fed Chair Jerome Powell on the role of corporate concentration in driving up prices for consumers during his renomination hearing to be Chair of the Board of Governors of the Federal Reserve System.
  • In a New York Times op-ed published in April 2020, Senator Warren urged Congress to focus on cracking down on price gouging in its ongoing effort to address the impact of the coronavirus pandemic.
  • In March 2020, Senator Warren joined her colleagues in urging the FTC to use its full authority to prevent abusive price gouging on consumer health products during the COVID-19 pandemic. 

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