Retailers’ AI Pricing Puts Shoppers in the Dark

A United Kingdom coalition of 23 organisations, including the English Premier League, warned the Albanese government that weakening copyright laws could turn Australia into a “content laundering nation” for AI companies. Meanwhile, another fight over control of information and prices is stirring consumer concern in grocery aisles and online stores.

“There are major tensions happening right now between who's really going to have the power with some of these algorithms and usage of bots and AI: the companies or the shopper,” said Katie Thomas, who leads an internal consumer behavior think tank at management consulting firm Kearney. That question hangs over digital price labels, pricing algorithms and companies’ use of customer data. Shoppers often don't know what information companies collect or how they use it.

Who Controls the Price

Digital price labels are replacing paper tags in grocery aisles. Artificial intelligence tools can also help businesses predict how customers might respond to prices. Consumers already see prices change for flights, hotel rooms and rides. But when similar tools reach everyday shopping, concern grows that different people could pay different prices for the same product.

Companies say some fears misrepresent how their tools work. In a blog post last month, Walmart CEO John Furner said digital tags save workers' time and keep prices current. He said Walmart doesn't use them to raise prices based on weather, time of day or an individual shopper. His account points to a broader problem: companies don't always explain what data they collect or how they use it, leaving consumers to guess where the line sits.

Dynamic pricing responds to market conditions such as supply and demand. Airlines adjust fares as departures approach, while Uber raises fares when demand exceeds available drivers, a practice called surge pricing. Web data company Decodo tracked price changes in 2025 across electronics, clothing and home-improvement supplies. About half of the U.S. changes it recorded were decreases, said Gabriele Vitke, a senior product marketing manager.

Retailers generally update electronic shelf prices on a regular schedule, often weekly, because shoppers value consistency, said Asa Farquhar of retail technology company Relex Solutions. Researchers who tracked prices at an unnamed grocery chain found “virtually no surge pricing” after digital labels arrived. Farquhar said changing prices throughout the day, as airlines or rideshare apps do, is “exceedingly rare in grocery and general merchandise today.” Consumer advocates and labor unions have nevertheless opposed the technology, citing concern that the labels could eventually enable surge or personalized pricing.

Data, Algorithms and the Limits of Oversight

Personalized pricing offers different prices or discounts based on information such as location, income and web-browsing habits. Some advocacy groups and regulators call it “surveillance pricing.” Its prevalence remains unclear. A FTC staff report released in January 2025 found that intermediaries offering tools to tailor prices and promotions worked with at least 250 clients, including grocery and clothing retailers.

Legislators in at least 30 states have considered pricing bills this year, according to the National Conference of State Legislatures. Maryland, New Jersey and Connecticut enacted restrictions on using shoppers’ personal data to determine prices. The FTC has proposed an enforcement policy warning that failing to disclose personal data use in setting individualized prices could violate consumer protection law. These measures address particular practices; the source offers no account of a broader change in who owns the data or sets the terms of retail pricing.

A 2025 investigation by Consumer Reports, Groundwork Collaborative and More Perfect Union found that Instacart showed shoppers different prices for identical products at the same stores. Instacart later ended what it described as tests that randomly assigned shoppers to groups, rather than setting prices based on personal information. California prosecutors sued Target in 2022, alleging its app showed lower prices before shoppers entered stores and raised them once they were inside. Target agreed to a $5 million settlement and a ban on using geofencing technology to increase prices.

Corporate Defenses, Corporate Reach

A survey by global consulting company Simon-Kucher of more than 2,200 business leaders in 28 countries and 39 industries last year found 41% used AI software to gather market intelligence, including competitors' prices, and 28% used it for “real-time price optimization.” The National Retail Federation said algorithmic pricing lets stores monitor and adjust prices according to supply, demand, seasonality and competitors' prices.

The FTC alleged in a 2023 antitrust lawsuit against Amazon that an algorithmic tool codenamed Project Nessie helped identify products whose prices could be raised with competitors likely to follow, generating more than $1 billion in excess profits. A trial is scheduled for next year. Amazon said the FTC's allegations “grossly mischaracterize” the tool, which it said was intended to prevent retail price-matching from producing unsustainably low prices. The company said it tested the tool for a few years, found it didn't work as intended and scrapped it before the lawsuit.

The Australian Financial Review promoted an item titled “Rise of the rogue AI bots a horror show for retail, banking and travel,” by associate editor Joyce Moullakis. Its summary said JPMorgan filters out external artificial intelligence agents and warned that bots generate more than 57 per cent of web traffic; the page provided no further details. Walmart's Furner put the retail defense plainly: “We price the product, not the person.”