Kroger has been adding cutting-edge price tag technology to several locations over the past month, the grocer told The Cincinnati Enquirer, part of the USA TODAY Network.
Electronic shelf labels, or ESL, allows a grocer to change prices of goods in stores via computer without a clerk changing stick-on labels. Kroger said nationally about one in four of its stores has it.
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, known as “surge pricing.”
Kroger defends technology, provides new details
Kroger quietly began deploying the label in about a dozen locations in local stores, mostly in the outer suburbs of its hometown. Company officials have generally defended its use, but have so far declined to answer questions about when and where they will deploy the technology.
In a statement, Kroger officials said all but one of the company’s 104 stores in Cincinnati, Northern Kentucky and the Dayton area have the label technology. It has deployed it nationally in “almost all” of its 21 retail divisions, where “the rollout continues.”
The company did not say how long the rollout would take in other divisions or give any timeline for 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, Dillon’s, 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 do not yet have a label; Its other divisions have at least started using them.
Small equipment, big controversy
Kroger shoppers won’t even notice the change. The tags don’t look much different from previous stick-on labels. But if a buyer looks closely, he or she will see that all the tags are framed in white, plastic cases as thick as a book of matchsticks.
Pricing techniques and how they can be used to entice customers have come under intense scrutiny in this decade, which has seen historic inflation not seen since the early 1980s. The outbreak of the COVID-19 pandemic, the Ukrainian invasion and this year’s war against Iran have contributed to a nearly 29% rise in US prices since March 2020, according to the US Bureau of Labor Statistics. But inflation in supermarkets has been even worse with prices rising 31% over the same period.
In 2024, U.S. Senator Elizabeth Warren, D-Mass., demanded Kroger provide more information about how it would use the technology.
In a response letter, Kroger said the ESL would be used to reduce costs, not raise prices.
“Kroger does not and has never engaged in ‘surge pricing’.” Kroger’s business model is based 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 executives said the grocer’s new CEO Greg Foran has made clear he wants to cut prices to drive sales growth, not raise them. In a recent Bloomberg interview, Foran outlined plans to cut prices on “thousands of products.”
“Our use of electronic shelf labels is focused on providing accurate pricing and meaningful savings to our customers,” Kroger said in a statement to The Inquirer.
Walmart also uses digital price tags
Kroger is hardly alone in using technology.
Earlier this year, Arkansas-based supercenter juggernaut Walmart revealed that 2,300 of its stores, or half of its U.S. retail presence, have electronic shelf labels and the rest will have them within a year.
Kroger operates approximately 2,700 stores in 35 states and the District of Columbia. The company employs 403,000 employees.
Reporting by Alexander Coolidge, USA TODAY Network/Cincinnati Enquirer. USA TODAY Network via Reuters Connect.
