Retail pricing tools face growing consumer and regulatory scrutiny

U.S. retailers are adopting AI-assisted pricing tools and electronic shelf labels, fueling consumer concern about unpredictable prices and the use of personal data. AI can analyze sales patterns, competitors’ prices and other information to predict demand and recommend prices. However, the extent of its use in retail pricing remains unclear, and limited transparency about data collection has deepened shoppers’ suspicions.

Dynamic pricing adjusts charges according to market conditions, while personalized pricing uses information about individuals or groups to offer different prices or discounts. Electronic shelf labels make updates easier but do not necessarily mean stores use either practice. Walmart says its labels do not change prices based on individual shoppers, weather or time of day. Researchers studying an unnamed grocery chain found virtually no surge pricing after electronic labels were introduced.

Legislators in at least 30 states have considered pricing bills this year. Maryland, New Jersey and Connecticut have enacted restrictions on using shoppers’ personal data to determine prices, while the Federal Trade Commission has proposed warning businesses that undisclosed personalized pricing could violate consumer protection law. Separate lawsuits involving Amazon and McDonald’s have raised concerns about pricing algorithms undermining competition. Both companies dispute the allegations, highlighting the broader debate over whether these systems improve pricing decisions or give businesses unfair leverage.