Senate: Kroger's new AI pricing scheme is 'corporate greed out of control'

Kroger's implementation of a dynamic AI pricing model has drawn criticism from Senators Elizabeth Warren and Bob Casey, who argue that it exemplifies unchecked corporate greed. The senators expressed concerns in a letter to Kroger's CEO, Rodney McMullen, about potential privacy violations and increased inequality stemming from the company's collaboration with AI firm IntelligenceNode. This dynamic pricing system, which has been in place since 2018 and expanded to 500 stores, allows Kroger to adjust prices based on individual customer data, potentially leading to price hikes based on what customers can afford. The senators highlighted that this system could exploit sensitive consumer data, as it includes plans for facial recognition technology to tailor offers to shoppers. They criticized Kroger for adopting practices like "shrinkflation" and "greedflation," which inflate prices while reducing product sizes. With grocery costs rising, the senators emphasized that dynamic pricing would likely increase Kroger's profits at the expense of consumers. They demanded transparency regarding the pricing strategies employed through the Electronic Shelving Label (ESL) system and raised questions about the frequency of price changes. The lawmakers have previously advocated for measures to combat price gouging and lower food prices.

- Kroger's dynamic pricing model has been criticized as a form of corporate greed.

- Senators Warren and Casey raised concerns about privacy and inequality due to personalized pricing.

- The system uses AI and facial recognition to tailor prices based on customer data.

- Critics argue that dynamic pricing could lead to higher profits for Kroger while burdening consumers.

- The senators are seeking transparency on how Kroger establishes and adjusts prices.