Ohio lawmakers must prevent Kroger’s surveillance pricing scam
Kroger’s controversial customer surveillance scheme was recently the subject of harsh bipartisan criticism in Congress. Ohio lawmakers have an opportunity to join the nationwide effort to protect consumers from the Cincinnati company’s pricing program. Kroger was the literal poster child for bad corporate behavior at the U.S. Senate hearing called, “Your Data, Their Profit: The […]
Kroger’s controversial customer surveillance scheme was recently the subject of harsh bipartisan criticism in Congress. Ohio lawmakers have an opportunity to join the nationwide effort to protect consumers from the Cincinnati company’s pricing program.
Kroger was the literal poster child for bad corporate behavior at the U.S. Senate hearing called, “Your Data, Their Profit: The Consumer Cost of AI Surveillance Pricing.”
In front of a sign emblazoned with Kroger’s name, Republican U.S. Sen. Josh Hawley, R-Missouri, stated “Kroger is not just a grocery store … It is a data-selling mega-corporation” that earns “a third of its income … from selling the personal data of its own customers.”
The ire came from both sides of the aisle. Democratic U.S. Sen. Dick Durbin, D-Illinois, explained that, “Kroger’s loyalty program uses your data to predict exactly how much money you make.”
In short, surveillance pricing is a tool companies use to learn as much as they can about shoppers, including our income and education level, then leverage that information to charge each individual the maximum price they will pay. In Kroger’s case, it sells collected customer data to other companies, earning over $500 million last year.
Surveillance pricing may sound like science fiction, but it’s anything but. A former chief data officer of Visa testified before the Senate that it already costs the typical American household roughly $1,800 a year.
Hawley called surveillance pricing “the unholy trinity of everything Americans hate: spying on people, ripping them off, and taking away jobs.”
More than 2,000 shoppers have written to KrogerHurtsFamilies.com, a portal my organization opened this summer, to report how the company scams customers.
The spying: As one customer put it, “what at first seemed innocent … I now see as an absolute invasion of my privacy. They are tracking me! I feel like a bug under their corporate microscope.”
The ripping off: Hundreds of customers tell us they’re overcharged at the register, and a Consumer Reports exposé confirms it’s systemic: shoppers at Kroger stores nationwide paid nearly 20% more than the advertised sale price because of expired tags and other errors.
The jobs: As it turns out, Kroger cutting its workforce may be part of the pricing problem. “I work at Kroger and the problem with items ringing up wrong is because they cut hours,” a worker shared. “They don’t have enough people doing tags.”
Kroger is working to remedy this not by hiring more workers but by rolling out electronic shelf labels: AI-driven technology that could allow the grocer to change prices in an instant based on the weather or other temporary factors – or even what it knows about us and our families. Flu going around? Kroger could jack up the prices of cold medicine or tissues just when we need these products most.
Kroger says it doesn’t engage in this kind of surge or personalized pricing. But it won’t commit to not using these tools against us, and it has spent millions of dollars developing secret shopper profiles, digital price tags, facial recognition technology, and partnerships with big AI companies: the exact infrastructure it’d need to make each of us pay the most we’ll tolerate. Nobody spends that kind of money building a machine they don’t intend to use.
Kroger’s history gives us every reason to believe it intends to. A senior executive admitted under oath that Kroger raised milk and egg prices above inflation during the pandemic, raking in record profits. The company also admitted to charging higher prices in “no-competition” zones: places where shoppers have few other grocery options.
The machine is built, and the motive is on the record. Right now, the only thing standing between Ohio shoppers and the “on” switch is Kroger’s word.
Other statehouses are not waiting to find out what that word is worth. Lawmakers in at least 11 states introduced surveillance-pricing bills, and bipartisan bills are moving in Congress.
Ohio, the one state with the most at stake and the most leverage, has introduced nothing.
That’s why it’s time Ohio officials crack down on surveillance pricing before it’s too late.
Taylor Warren is the president of the Center for Responsible Food Business, a nonprofit dedicated to promoting corporate social responsibility to build a better food system. Through industry engagement, research, and consumer education efforts, the Center works to advance practices that benefit all stakeholders from the farm to the dinner table.