Kroger, in collaboration with Microsoft, MSFT, has introduced facial recognition technology in its stores
Kroger’s Use of Facial Recognition Sparks Concerns Over Pricing Practices
Kroger has been integrating facial recognition technology with its EDGE (Enhanced Display for Grocery Environment) smart shelves and Electronic Shelf Labels (ESLs), which enable dynamic pricing and digital displays. Partnering with Microsoft, the company has installed cameras on these displays to collect customer demographic data—such as age and gender—to personalize in-store advertisements.
While Kroger has not disclosed the full scope of its facial recognition applications, the technology could potentially be used to offer targeted promotions based on customer insights.
Lawmakers Raise Concerns Over Potential Discriminatory Practices
Rep. Rashida Tlaib (D-MI) and other lawmakers are voicing strong concerns over the possible misuse of this technology, including surge pricing based on customer profiles. Tlaib, a progressive lawmaker and member of the "Squad," took to X to criticize Kroger, stating:
“Families are struggling to put food on the table. Facial recognition technology is often discriminatory and shouldn’t be used in grocery stores to price gouge residents.”
The debate over Kroger’s use of facial recognition dates back to August, when Senators Elizabeth Warren (D-MA) and Bob Casey (R-PA) sent a letter to the company warning of potential abuse. They expressed concern that Kroger’s ESLs and AI-driven pricing models could allow the company to adjust prices in real time based on customer demographics.
The senators cautioned that such a system might allow Kroger to determine and display a customer’s maximum willingness to pay for essential items—potentially leading to higher prices for certain shoppers.
Kroger Defends Its Use of Smart Shelf Technology
Kroger has strongly denied allegations that it intends to implement surge pricing based on customer profiles. The company insists that its business model is built on lowering prices to attract more customers and that the use of ESLs and digital pricing is designed to enhance efficiency, reduce waste, and streamline price updates.
A Kroger spokesperson stated:
“Kroger’s business model is centered on lowering prices to bring in more customers. Everything we do supports this strategy. To suggest otherwise is not true.”
Kroger also clarified its partnership with Microsoft, explaining that while the technology enables personalized in-store advertising, the company does not manipulate individual pricing based on facial recognition data. Instead, dynamic pricing is meant to reflect broader supply and demand trends to ensure better value for shoppers.
Skepticism Remains Among Critics
Despite Kroger’s assurances, lawmakers and consumer advocates remain skeptical, warning that the potential for pricing discrimination is high, especially for essential grocery items. Tlaib and others continue to push for transparency and regulatory oversight, emphasizing the risks of allowing AI-driven pricing in retail environments.
As the debate over facial recognition in grocery stores escalates, Kroger faces mounting pressure to ensure that its technology is used responsibly—without exploiting customers or reinforcing economic disparities.