Kroger has been adding cutting-edge price tag technology at several locations over the past month, the grocer told The Cincinnati Enquirer, part of the USA TODAY Network.
Electronic Shelf Labels, or ESLs, allow a grocer to change prices on goods in stores via computer without having a clerk change the stick-on labels. Kroger said nearly one out of every four of its stores nationally have them.
The Cincinnati-based supermarket giant said the move will save it countless hours of work and free up associates to help customers more.
Critics of the technology fear it could open the door to predatory pricing practices, such as raising prices during busy periods, called “surge pricing.”
Kroger Defends Technology, Provides New Details
Kroger quietly began deploying the labels in local stores last fall in about a dozen locations, mostly in outer suburbs of its hometown. Company officials have defended their use in general but refused until now to answer questions regarding when and where they would deploy the technology.
In a statement, Kroger officials said all but one of the company’s 104 stores throughout the Cincinnati, Northern Kentucky and Dayton region have the label technology. It has deployed it in “almost all” of its 21 retail divisions nationally, where the “rollout continues.”
The company did not indicate how far along the rollout was in other divisions or a timeline when it would be completed. Kroger’s divisions span the country from California to Georgia and from Michigan to Texas. The retailer operates stores under the Kroger banner name as well as Fred Meyer, Ralphs, Harris Teeter, Pick ‘n Save, Dillons, King Soopers, Mariano’s, Fry’s, QFC and others.
Kroger said only North Carolina-based Harris Teeter, Indiana-based Ruler Foods and its Midwestern Food 4 Less stores don’t have any of the labels yet; its other divisions have all at least started using them.
Small Devices, Bigger Controversy
Kroger shoppers may not even notice the change. The tags don’t look too different from the previous stick-on labels. But if a shopper looks closely, they will notice the tags are all framed in white, plastic cases that are about as thick as a book of matches.
The pricing technology and fears it could be used to gouge customers has drawn intense scrutiny in a decade that has seen historic inflation not seen since the early 1980s. The outbreak of the COVID-19 pandemic, the Ukrainian invasion and this year the war against Iran have contributed to U.S. prices climbing nearly 29% since March of 2020, according to the U.S. Bureau of Labor Statistics. But inflation has been even worse at the supermarket with prices rising 31% during the same period.
In 2024, U.S. Senator Elizabeth Warren, D-Mass., demanded Kroger provide more information about how it will use the technology.
In a response letter, Kroger said ESLs would be used to lower costs, not raise prices.
“Kroger does not and has never engaged in ‘surge pricing.’ Kroger’s business model is built on … lowering prices to attract more customers,” wrote Paula Kash, the retailer’s group vice president of operations. “This innovative use of technology frees up our associates’ time so they can prioritize serving customers in our stores.”
Kroger officials noted the grocer’s new CEO Greg Foran has made it clear he wants to cut prices, not raise them, to jumpstart sales growth. In a recent Bloomberg interview, Foran outlined a plan to cut prices on “thousands of products.”
“Our use of electronic shelf labels is focused on providing our customers with accurate pricing and meaningful savings,” Kroger said in a statement to The Enquirer, noting for example the labels will make it easier for stores to mark down products nearing their sell-by dates.
Walmart Uses Digital Price Tags as Well
Kroger is hardly alone in using the technology.
Earlier this year, Arkansas-based supercenter juggernaut Walmart disclosed that 2,300 of its stores, or half its U.S. retail presence, have electronic shelf labels and the rest would have them within a year.
Kroger operates nearly 2,700 stores in 35 states and the District of Columbia. The company employs 403,000 workers.
Reporting by Alexander Coolidge, USA TODAY NETWORK / Cincinnati Enquirer. USA TODAY Network via Reuters Connect.
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