Senators raised concerns about how dynamic pricing can be used to price gouge and squeeze American families
Kroger is the largest supermarket operator in the United States, boasting over 400,000 employees and nearly 3,000 stores across the country.
Since fall 2023, Senator Casey has produced four reports detailing his investigations into corporate greed squeezing families’ budgets
The Senators wrote: “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”
Washington, D.C. – U.S. Senators Bob Casey (D-PA) and Elizabeth Warren (D-MA) raised concerns about Kroger’s use of digital price tags, or Electronic Shelving Labels (ESLs), to surge grocery prices and exploit working families. Digital price tags allow corporations to engage in dynamic pricing–changing the prices of goods based on temporary factors including the time of day or the weather. Dynamic pricing allows corporations to price gouge and suddenly raise the cost of goods without warning. Kroger has also proposed to place facial-recognition cameras on its digital shelves that can make different offers to shoppers based on their age, gender or potentially their race and other personal characteristics. The Senators warned Kroger executives about the harms of dynamic price gouging and urged the corporation to put consumers over profits.
“The increased use of dynamic pricing will drive company profits higher – leaving consumers with the bill […] 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,” wrote the Senators.
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.
Since November 2023, Senator Casey has been investigating greedflation, or corporate price gouging and other actions by big corporations that have squeezed the budgets of American families and contributed to the increase in inflation. In February, the New York Times featured Senator Casey’s investigation into shrinkflation. In June, Casey sent letters to Target, Walmart, and Amazon to demand they disclose information about how they have made pricing decisions over the last two years.
In February 2024, Senator Casey expressed concern about the Wendy’s Company’s plans to switch to surge pricing. He highlighted how changing menu prices based on time of day unfairly penalized working American Families. Wendy’s subsequently backtracked on its surge pricing proposal.
The same month, Casey also introduced two pieces of legislation to protect American families from greedflation and shrinkflation. The Price Gouging Prevention Act would protect American families from greedflation by banning grossly excessive price increases and cracking down on corporations that engage in price gouging. The Shrinkflation Prevention Act, would empower the Federal Trade Commission and state attorneys general to crack down on corporations that deceive consumers by selling smaller sizes of their products without lowering the prices.
Senator Casey has released four reports in his greedflation series. His first report, “Greedflation: How Corporations Are Making Record Profits on the Backs of American Families,” details how big corporations are using inflation as cover to raise prices and rake in record profits at the expense of middle-class American families and laying out Senator Casey’s vision to hold greedy corporations accountable. Casey’s second report “Stuffing Their Pockets: How Big Food and Agriculture Businesses Are Making Your Holiday Meals More Expensive," examines how the agribusiness companies that process Americans’ food have increased prices for everyday staple foods and raising questions about why those price increases are necessary, particularly during the holiday season. Casey’s third report, “Less Bang for Your Buck: Casey Releases Shrinkflation Report Exposing Big Corporations for Reducing Product Size While Keeping Prices High,” calls out household consumer products, food, and beverage corporations for reducing the size of household consumer goods, from toilet paper to cereals to snacks, while continuing to sell them at the same retail price. Casey’s fourth report, “Additional Charges May Apply: How Big Corporations Use Hidden Fees to Nickel, Dime, and Deceive American Families” details how big corporations are tacking on excessive fees at the tail end of everyday purchases, from internet plans to ATM withdrawals
In April, Casey released a greedflation spotlight, “The Pink Tax: How Companies Tack Extra Costs on Women in the Age of Greedflation,” which details how corporate greed has disproportionately harmed the budgets of women. A second spotlight released in August, “A Steady Stream of Price Hikes: How Streaming Services Put Profit Over Consumers," exposes how streaming platforms increase the cost of subscriptions while decreasing the amount of content available to stream, implementing streaming restrictions, and introducing advertisements to a previously ad-free platform.
Read the letter HERE.
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