Maryland, Connecticut and New Jersey have already banned surveillance pricing
The report, “Priced Out, Pushed Out: Electronic Shelf Labels Raise Prices and Shrink Paychecks,” draws on the label manufacturers’ own marketing materials to argue that the digital tags would automate the pricing and shelf-stocking work that grocery workers now perform, while connecting store shelves to the same algorithmic pricing software online retailers already use to tailor prices to individual customers.
“Through our analysis, we found that the implementation of electronic shelf labels are likely going to drive prices even higher. The reason being that these labels are connected to the same algorithmic pricing software that online retailers are already using,” said Sunny Glottmann, policy and programs manager at the AFL-CIO Tech Institute and a co-author of the report.
“Electronic shelf labels create the infrastructure that would make rapid algorithmic price changes easier to implement at scale, and this raises concerns for consumers that are already struggling with grocery costs,” Glottmann said.
Surveillance pricing allows retailers to change prices based on personal data collected from customers, the report argues. Lauren McFerran, the institute’s executive director and a former chairman of the National Labor Relations Board, said the labels “enable instantaneous price changes.”
“This is a technology that both is enabling this kind of ‘how do we extract the absolute most money out of grocery shoppers that is humanly possible’ and ‘how do we squeeze our workers as much as is humanly possible,’” McFerran said.
The report comes as several states have begun introducing legislation to ban surveillance pricing and electronic shelf labels. In April, Maryland became the first state in the U.S. to ban surveillance pricing. Connecticut signed a ban into law in June and New Jersey signed a ban into law in July.
A May poll released by the United Food and Commercial Workers union found 68% of Americans believe surveillance pricing will increase grocery costs and 65% say digital price tags will do the same. Some 67% support banning digital price tags and surveillance pricing, with only 26% opposing a ban.
Ademola Oyefeso, vice-president of UFCW International, said that as retailers implement electronic shelf labels, the labor cuts occur gradually, with workers who typically change prices on shelves losing hours first. “Slowly, if someone has a full-time job or a part-time job, they go from full-time to part-time, from part-time to no time, and that’s what’s going to start happening across the entire industry,” Oyefeso said.
“We have gone with paper labels for over 100 years. It’s worked. It’s the trust stores have built with people. I know [that] you and I are paying the same price. If we come there on Monday, you and I are going to pay the same price on Monday, on Tuesday, on Wednesday,” he said.
In December, Instacart ended a pilot program that allowed retailers to charge online shoppers different prices for the same products after an investigation by Consumer Reports and Groundwork Collaborative found grocery prices could differ by as much as 23% between customers.
“ESLs are the embodiment of surge pricing and surveillance pricing,” Oyefeso said. “Shelf labels allow grocery shopping to become airline ticket shopping.”