CNBC has a story about how “Walmart is currently rolling out digital price tags to replace the old paper ones — the plan is to roll them out in all stores across the U.S. by the end of the year.”
Walmart, of course, isn’t alone. CNBC notes that “Kroger has also begun experimenting with the technology. The speed of digital tags offers stores the promise of extra efficiency in an age of supply chain shocks and sticky inflation, but it is also drawing some concerns from lawmakers about surge pricing.”
The story points out that “some lawmakers have taken a dim view of DSLs, calling them a gateway to surge pricing. Sen. Ben Ray Luján (D-New Mexico) has taken a lead legislative role in banning not just dynamic pricing, but in taking direct aim at DSLs.
“‘With food costs rising each month, it’s more important than ever that any new technologies implemented in grocery stores are helping to lower costs, not raise them,’ Luján said in a statement to CNBC. ‘That is why I’ve introduced the Stop Price Gouging in Grocery Stores Act, legislation that is intended as a preventative measure to put common-sense guardrails in place at large retail stores and protect consumers.’
“One of those guardrails is the banning of DSLs in any grocery store over 10,000 square feet. Walmart Super Centers can approach a size of 200,000 square feet; even its smaller Neighborhood Market stores tend to be well above the 10,000-square-foot threshold. Such a law would even apply to most Trader Joe’s, which has a much smaller footprint of around 10,000-15,000 square feet on average.
“Congresswoman Val Hoyle (D-Ore.) is sponsoring legislation in the House that would ban DSLs. ‘There needs to be laws and enforcement to protect consumers — and until then, I’d like to see them banned outright,’ Hoyle said. While there is no reported use of digital shelf labeling being tied to surge pricing yet, in her view, it’s only a matter of time.”
Meanwhile, the New York Post reports that other technology and pricing moves being made by Walmart are generating some controversy:
“Low prices could be in the rearview mirror at Walmart after it won two patents giving computer algorithms more of a role in product pricing.
“Last week, the retailer landed a patent for a demand forecast tool that’s designed to predict what shoppers will buy and recommend a price based on that.
“‘Categories may include, for example, a food item, outdoor equipment, clothing, housewares, toys, workout equipment, vegetables, spices,’ the filing noted … The ‘demand forecasting and price recommendation’ tool in the patent would use sources tied to a specific consumer, such as purchases, prices, methods of payment and customer ID, like a passport or driver’s license number.
“Walmart also obtained a patent in January for a system that ‘dynamically and automatically’ updates item prices online based on product popularity.
“With these two programs together, customers could potentially see something similar to Uber-style surge pricing, such as beer prices rising before a big sports game, or essentials costs increasing before a major storm.
“The company has been granted nearly 50 US patents so far this year, according to records from the U.S. Patent and Trademark Office.
“Walmart said that both last week’s and January’s patents were ‘unrelated to dynamic pricing,’ and that the patent issued at the start of 2026 was specifically for markdowns; the most recent, the company said, was designed to help merchant teams make decisions. ‘We don’t participate in surge pricing,’ a spokeswoman said.”
KC’s View:
I have a sense at the moment that this DSL/dynamic pricing story may be getting the kind of narrative momentum that food retailers are going to have trouble regaining. It could result in legislation, whether at the state or federal level,
There’s one quote in the story where someone says, “Capitalism breeds innovation, and the innovation is dynamically price gouging people based on how much they need something.”
And someone else says, “This isn’t innovative, it’s exploitative.”
Proponents of these systems say, correctly, that these initiatives essentially automate things that retailers have been doing anyway. The problem is that this argument isn’t landing – these days, there is a lot of concern about exactly that (and not just when it comes to pricing).
I suspect that the industry will be tempted to focus on the legislative problem; it will want to lobby its way out of this problem. But I think that the court of public opinion is equally, if not more important, in this case.
The DSL/dynamic pricing issue is one that is playing out against a background in which many people are concerned about AI and its impact on privacy, employment and the culture at large. Which means that distrust may be deep and it is going to take a long time and a lot of persuasion to convince people that they’re not be exploited and gouged.
I’m not sure what the answer is, but it feels more and more like this is going to be a hairball of an issue for the food industry.
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