Grocers face consumer pushback over dynamic pricing

State lawmakers target individualized pricing

Mechanisms grocers use to determine what to charge for food have long drawn scrutiny from regulators, politicians, and the public. Recent actions by state officials show the pushback against these methods is intensifying.

This isn’t the first time pricing controversies have hit the headlines. In 1982, a federal court fined three Cleveland-area supermarket chains more than $4 million for colluding to fix prices. In settling the case, the grocers agreed to distribute $20 million in coupons to shoppers, a move the Federal Reserve Bank of Cleveland described at the time as the largest consumer settlement in U.S. history. Decades earlier, in 1966, a woman in Denver sparked boycotts of five area grocery chains after a manager reportedly told her to “stick to your cooking and let us decide prices,” according to a 2016 recounting by Money magazine. Also that year, shoppers angry over high costs staged “shopping cart blockades” that forced some supermarkets to lower their prices.

More recently, federal and state officials have been investigating a modern trend: Retailers using information about people’s individual shopping behavior to set prices through a practice known as variable or surveillance pricing. Just last week, New Jersey became the latest state to implement a law limiting how grocers can use data about consumers to compute what to charge individual shoppers for goods they buy. The law also targets electronic shelf labels, which critics have said grocers can use to rapidly adjust prices to the detriment of consumers. Proponents of the technology, such as the Food Industry Association, say it can “improve price accuracy, reduce food and paper waste and enhance the shopping experience.”

Earlier this year, governors in Maryland and Connecticut signed measures that crack down on variable pricing. Lawmakers in New York state in June approved legislation blocking retailers from using personally identifiable data to customize prices. That bill is currently awaiting Governor Kathy Hochul’s signature.

Related: Meijer now accepts WIC for online buys

Federal agencies step into the debate

Industry groups are pushing back against the new restrictions. The Chamber of Progress, which opposes efforts to limit how retailers use data, argues that grocers need the freedom to use data-based strategies to offer the kinds of personalized discounts consumers have come to expect.

The National Grocers Association said that critics present a distorted view of how grocers set prices. They described the term “surveillance pricing” as “alarmist.” Doug Baker, vice president of industry relations for FMI, told a publication that grocers often use the ability to change prices dynamically to lower costs for consumers.

The patchwork of state-level actions to limit variable pricing could cause confusion among retailers. Attorneys for a law firm wrote in a blog post in June that businesses with interstate operations should consider their multi-state exposure. They urged retailers to determine if and how they use personal data to set prices and to determine whether those obligations require a change in operations.

For shoppers, the inability to rely on consistent pricing could erode trust in the shopping experience. If a regular customer finds their preferred milk is suddenly more expensive than a neighbor’s simply because of location data, the emotional impact of a grocery trip could shift from routine to anxiety. This shift might force consumers to switch brands or visit multiple stores to find stability, ultimately disrupting their weekly routines.

Related: Ahold Delhaize marks 10 years on Euronext

On the federal level, the FTC is also looking into regulating these practices. The agency announced in mid-2024 that it had started looking into “whether and how firms are using detailed consumer data to deploy surveillance pricing for consumers.” In a January 2025 statement, the agency said it had determined that retailers often use details about people’s online browsing or their location to “target individual consumers with different prices for the same goods and services.”

Former FTC Chair Lina Khan, who left the agency when the Trump administration took power, said in that statement that “Americans deserve to know how their private data is being used to set the prices they pay and whether firms are charging different people different prices for the same good or service.”

The FTC announced a proposal in April to begin a rulemaking process to address what it called “certain unfair or deceptive acts or practices relating to fees and charges for food and grocery items ordered through online delivery platforms.”