August 07, 2024 Washington, D.C. – At this time, U.S. Senators Elizabeth Warren (D-MA) and Bob Casey (D-PA) despatched a letter to Rodney McMullen, chairman and CEO of The Kroger Co. BB #:100073, elevating issues about Kroger’s use of Digital Shelving Labels (ESLs) to surge grocery costs and exploit shoppers.
ESLs are digital worth tags that enable corporations to interact in dynamic pricing, altering the costs of products primarily based on momentary components such because the time of day or the climate.
By updating worth tags with the straightforward click on of a button, firms can worth gouge, all of a sudden elevating the buyer prices at instances when sure merchandise are in highest demand.
Many grocery chains, together with Kroger, have quickly expanded their use of ESLs in recent times. Kroger started utilizing the expertise in 2018 and has since expanded it to 500 shops nationwide.
ESLs could assist Kroger extract most income from shoppers at a time when People are coping with the price of grocery costs: excessive grocery costs are a main concern amongst People who’re involved about inflation.
“The elevated use of dynamic pricing will drive firm income greater – leaving shoppers with the invoice,” wrote the lawmakers.
Kroger’s ESL gadget, known as the Enhanced Show for Grocery Setting (EDGE) shelf, was created by means of a partnership with Microsoft. It might allow Kroger to collect information on clients to find out how a lot worth mountaineering they’ll tolerate after which current every buyer with customized worth tags on the grocery shelf.
“I’m involved about whether or not Kroger and Microsoft are adequately defending shoppers’ information, and that as Kroger expands the customized buyer expertise, clients will in the end be supplied a worse deal,” wrote the lawmakers.
The lawmakers requested that Kroger present details about its utilization of ESL platforms reminiscent of EDGE to conduct dynamic pricing and gather delicate client information.
Kroger is the most important grocery store operator in the USA, boasting over 400,000 workers and almost 3,000 shops throughout the nation.
“It’s outrageous that, as households proceed to battle to pay to place meals on the desk, grocery giants like Kroger proceed to roll out surge pricing and different company profiteering schemes,” concluded the lawmakers.
As a champion for American shoppers and a safe and wholesome economic system, Senator Warren has engaged in oversight of firms for unfairly growing costs for shoppers. She has additionally been calling for extra competitors and stronger enforcement of antitrust legal guidelines to convey down costs for households:
- On Could 13, 2024, Senator Warren and Rep. Jim McGovern led a gaggle of lawmakers in a letter to President Joe Biden, urging the Biden administration to make use of its govt authority to take motion to decrease meals costs.
- On Could 3, 2024, throughout a listening to of the U.S. Senate Committee on Banking, Housing, & City Affairs, Senator Warren known as out meals trade worth gouging and urged motion to fight unfair pricing practices.
- On April 17, 2024, Senator Warren (D-Mass.), Bob Casey (D-Penn.), and Ben Ray Luján (D-N.M.) wrote to DoorDash and UberEats, the 2 largest supply platforms, calling out their use of hidden junk charges.
- On March 28, 2024, Senator Elizabeth Warren (D-Mass.) and Consultant Mary Homosexual Scanlon (D-Penn.) led a gaggle of 14 lawmakers in a letter to FTC Chair Lina Khan urging the company to revive enforcement of the Robinson-Patman Act (RPA), a vital device to advertise truthful competitors within the meals trade.
- On February 28, 2024, Senator Warren joined Senator Bob Casey (D-Pa.) in introducing the Shrinkflation Prevention Act to crack down on firms that deceive shoppers by promoting smaller sizes of their merchandise with out reducing costs.
- On February 15, 2024, Senators Warren, Baldwin, Casey, and U.S. Consultant Jan Schakowsky (D-Sick.) reintroduced the Worth Gouging Prevention Act of 2024, which might defend shoppers and prohibit company worth gouging by authorizing the FTC and state attorneys basic to implement a federal ban in opposition to grossly extreme worth will increase.
- In December 2023, Senator Warren urged the FTC to dam the Kroger-Albertsons merger, which might give the 5 largest meals retail corporations management of 55 p.c of all grocery gross sales, permitting them to additional management and in the end increase client costs, whereas additionally decreasing job competitors, lowering wages, and lowering the bargaining energy of organized labor.
- In November 2023, Senator Warren known as out TransDigm for its refusal to offer price and pricing info wanted to stop worth gouging of taxpayers and the Division of Protection.
- Prior to now few years, Senator Warren has urged the Biden administration to carefully scrutinize different doubtlessly anticompetitive mergers that might result in greater costs for shoppers and speed up trade consolidation. She has led letters concerning the proposed mergers of Frontier and Spirit airways, JetBlue and Spirit Airways, Sanderson-Wayne, WarnerMedia-Discovery, and Amazon-MGM.
- In March 2022, Senator Warren launched the Prohibiting Anticompetitive Mergers Act to assist stomp out rampant trade consolidation that enables corporations to lift client costs and mistreat employees. The invoice would ban the most important, most anticompetitive mergers and provides the Division of Justice and Federal Commerce Fee the enamel to reject offers within the first occasion with out courtroom orders and to interrupt up dangerous mergers.
- In February 2022, at a listening to, Senator Warren known as out firms for abusing their market energy to lift client costs and enhance income.
- That very same month, Senator Warren requested the Division of Justice to take aggressive motion in opposition to firms violating antitrust legal guidelines to hike costs for shoppers.
- In January 2022, Senator Warren questioned Federal Reserve nominee Lael Brainard about market focus and worth gouging driving inflation.
- At a January 2022 listening to, Senator Warren pressed Fed Chair Jerome Powell on the function of company focus in driving up costs for shoppers throughout his renomination listening to to be Chair of the Board of Governors of the Federal Reserve System.
- In a New York Occasions op-ed printed in April 2020, Senator Warren urged Congress to give attention to cracking down on worth gouging in its ongoing effort to deal with the influence of the coronavirus pandemic.
- In March 2020, Senator Warren joined her colleagues in urging the FTC to make use of its full authority to stop abusive worth gouging on client well being merchandise throughout the COVID-19 pandemic.
