Kroger’s Plan to Use Facial Recognition Raises Concerns About Surge Pricing
Matt Novak October 16, 2024
Democratic congresswoman Rashida Tlaib recently sent a letter to Kroger over the grocery giant’s purported plan tointroduce digital price tags that could be changed in an instant to raise or lower prices for shoppers based on the time of day, the weather, or any other number of factors. But one particular detail in Kroger’s plan is raising the most eyebrows: The company intends to put cameras in stores that would be used for facial recognition.
News leaked over the summer that grocery giant Kroger was partnering with Microsoft to use electronic shelf labels, shortened in the grocery industry as ESLs, as part of an AI push to institute dynamic pricing at its grocery stores. The plan also includes so-called Enhanced Display for Grocery Environment (EDGE) shelf displays that would reportedly include cameras to capture customer information, including images of faces to better tailor ads.
But Rep. Tlaib, whose home state of Michigan has 120 Kroger locations, expressed concern about these technologies in her letter dated Oct. 11 and shared Tuesday for the first time publicly.
“Studies have shown that facial recognition technology is flawed and can lead to discrimination in predominantly Black and brown communities,” Tlaib said in her letter. “The racial biases of facial recognition technology are well-documented and should not be extended into our grocery stores.”
Kroger is the largest grocery store chain in the U.S. by revenue and owns a number of different brands, including Ralphs, Fred Meyer, Pick’n Save, Food 4 Less, and Dillions, among a host of others. Tlaib is worried that ESLs will allow Kroger’s stores to “use customer data to build personalized profiles of each customer” in such a way that it will be able to “determine the maximum price of goods customers are willing to pay.”
The plan for dynamic pricing and highly individualized advertising has drawn comparisons to the 2002 futuristic sci-fi movie Minority Report, in which Tom Cruise’s character gets served ads targeting someone with a Japanese surname because he’s been implanted with another man’s eyes.
Kroger told Gizmodo in an emailed statement on Wednesday that the company’s business model “is built on a foundation of lowering prices to attract more customers,” claiming that “customers are shopping more with Kroger now than ever because we are fighting inflation and providing great value.”
But Kroger didn’t agree with claims that ESLs would be used to raise prices.
“To be clear, Kroger does not and has never engaged in ‘surge pricing.’ Any test of electronic shelf tags is designed to lower prices for more customers where it matters most. To suggest otherwise is not true,” the statement continued. That quote is identical to a statement CNN received from an unnamed Kroger spokesperson defending the technology in August.
Tlaib’s letter isn’t the first from lawmakers expressing concern about facial recognition. Senators Elizabeth Warren and Bob Casey, both Democrats, sent a letter to Kroger back in August asking questions about the company’s plans. As the lawmakers phrased it, facial recognition could be used to “exploit sensitive customer data.”
The letter from Warren and Casey noted that analysts are worried dynamic pricing for grocery stores means food could soon be priced like airline tickets, creating a sense of urgency and scarcity that wouldn’t otherwise exist with static prices. It’s unclear whether Warren and Casey have received satisfactory answers to their lists of questions.
Kroger is under increased scrutiny over the company’s $24.6 billion merger with Albertson’s, which is currently making its way through state courts in Washington and Colorado over anti-trust concerns. Two Kroger executives took the stand in Denver District Court on Tuesday arguing that it needs to acquire Albertson’s as a way to compete against Walmart’s grocery business, according to the Denver Post. The FTC has also challenged the merger, arguing that it would reduce competition and raise prices for consumers.
https://gizmodo.com/krogers-plan-to-use-facial-recognition-raises-concerns-about-surge-pricing-2000512685