Retail pricing tools draw consumer scrutiny

U.S. consumers are increasingly uneasy about retailers and restaurant chains using AI and other technology to set prices. Limited transparency about customer data collection has fueled concerns that shoppers could pay different amounts for identical products. Walmart says its digital shelf labels save workers time and keep prices current, rather than adjusting charges for individual shoppers, weather or time of day.

The technologies serve distinct purposes. Dynamic pricing adjusts charges as market conditions change, while personalized pricing uses information about individuals or groups to tailor prices and discounts. Algorithmic systems can support either approach, with AI helping predict demand and assess potential sales and profits. Electronic shelf labels make updates easier but do not inherently introduce surge pricing. Researchers tracking an unnamed grocery chain found virtually no surge pricing after the labels were introduced.

Regulatory scrutiny is growing. Legislators in at least 30 states have considered pricing bills this year, and the Federal Trade Commission has proposed warning businesses that undisclosed use of personal data to set individualized prices could violate consumer protection law. Maryland, New Jersey and Connecticut have enacted restrictions. Separate lawsuits involving Amazon and McDonald’s allege that pricing tools undermined competition, allegations the companies dispute. How widely retailers use AI or personal information to determine prices remains unclear.