It makes sense that prices rise when demand increases. But what happens when grocery prices go up during the busiest time of the day — does it still make sense? Kroger has begun rolling out digital price tags to its nearly 2.8K US stores, while Walmart plans to deploy them in 2.3K stores by 2026. While some experts suggest prices could actually decrease, Congress members warn that grocers might misuse the technology to raise prices during peak hours, a concept known as surge pricing.
- After Congress sent a letter to Kroger expressing these concerns, the leading grocery retailer denied the allegations, and Walmart stated in an email that it does not plan to implement surge pricing.
- Studies in Europe, where digital price tags are more commonly used, show that the average price per unit sold has decreased while the quantity of items sold has increased with this technology.
No added surge: The concept of surge pricing has been around for decades in the airline and hospitality industries and has since spread into delivery and ride-hailing apps. Last year, Wendy’s CEO announced plans to test dynamic pricing, clarifying that it would not be “surge pricing.” Meanwhile, the UK’s largest pub, Slug and Lettuce, faced backlash for its plans to implement surge pricing on beer. Given its growing prevalence, it’s understandable that consumers are worried grocers might exploit this technology, especially since the industry has faced allegations of price-gouging following years of consolidation.
