How Surveillance Pricing Could Raise-or Lower-Your Grocery Costs

Lawmakers are moving to crack down on "surveillance pricing" in grocery stores as most Americans say they want the practice banned altogether.

Newsweek has broken down how the practice could potentially increase-or decrease-grocery costs.

Maryland last month became the first state to ban certain forms of surveillance pricing in grocery stores, part of a broader push by lawmakers to limit this model, which uses personal data such as shopping history, location, loyalty-program activity and browsing behavior to help tailor prices or promotions for individual shoppers.

Some 67 percent of Americans support banning electronic shelf labels and surveillance pricing in grocery stores, while 68 percent believe the practice could increase grocery costs, according to a Gizmodo survey published on Tuesday.

What Is Surveillance Pricing?

Surveillance pricing is a model in which retailers use consumer data-including shopping history, demographics, location, browsing activity and loyalty-program use-to help determine prices or promotions shown to individual shoppers.

Supporters of the technology say it can improve efficiency by helping stores respond more quickly to demand, reduce food waste through faster markdowns and deliver more targeted discounts to shoppers.

Critics argue the systems could allow stores to charge different customers different prices for the same items, particularly as grocery chains expand digital shelf labels, app-based discounts and AI-powered pricing technology.

The issue has drawn growing scrutiny from regulators and lawmakers as grocery stores expand digital shelf labels, loyalty apps and AI-powered pricing systems. In a January report, the Federal Trade Commission (FTC) said companies can use consumer data-including demographics, browsing behavior and shopping history-to help shape individualized prices and promotions. Maryland has already passed a law restricting certain forms of surveillance pricing in grocery stores, while several other states are considering similar legislation.

How Surveillance Pricing Could Raise Grocery Costs

Prices could rise faster during busy shopping periods

Consumer advocacy groups and labor unions have warned that electronic shelf labels could allow grocery stores to change prices much more rapidly during periods of high demand. The United Food and Commercial Workers International Union (UFCW), which has backed legislation restricting surveillance pricing, said digital pricing systems could make it easier for retailers to increase prices instantly during holidays, emergencies or supply shortages.

Loyal customers could end up paying more

The Electronic Privacy Information Center (EPIC) has argued that surveillance pricing systems could identify shoppers who are willing to keep buying certain products even after prices increase. In a report last February, EPIC warned that retailers could use loyalty-program data, shopping habits and purchase history to determine which customers are less price-sensitive and reduce discounts offered to them.

The FTC has similarly said companies can use browsing behavior, demographics and shopping history to help shape individualized pricing systems.

Non-app users could receive worse deals

Consumer Reports has warned that app-based pricing and personalized promotions can create disparities between shoppers who share personal data and those who do not. Shoppers who do not use smartphones, loyalty programs or grocery apps could increasingly miss out on lower prices and personalized promotions available to other customers.

Demographics and location could influence pricing

The FTC said in a January report that companies can use data including demographics, location, browsing patterns and shopping history to help determine individualized prices and promotions. Privacy advocates and lawmakers have raised concerns that the systems could eventually lead to different prices based on where shoppers live, what brands they buy or how much they typically spend. Maryland lawmakers cited those concerns when passing the country's first law restricting certain forms of surveillance pricing in grocery stores.

How Surveillance Pricing Could Lower Grocery Costs

Personalized discounts could help some shoppers save money

Some retailers and industry groups argue that surveillance pricing technology can be used to deliver more relevant discounts to shoppers based on their buying habits and preferences.

The National Retail Federation has said personalized pricing and promotions can help consumers receive discounts on products they are more likely to purchase, while grocery chains increasingly use loyalty apps to send targeted coupons and offers directly to customers. Supporters argue that the systems could especially benefit price-conscious shoppers who regularly use digital coupons and rewards programs.

Digital pricing can reduce food waste

Retailers including Walmart have argued that digital price labels improve pricing accuracy and allow employees to update prices more quickly.

In a June 2024 announcement, Walmart, which has rolled out digital shelf labels to thousands of stores, said the technology could reduce the time workers spend replacing paper shelf tags and help stores respond faster to inventory changes and promotions. Supporters of the technology argue that faster updates could also help stores apply discounts to products nearing expiration before food goes to waste.

Automation could lower operating costs

Retail industry groups say digital pricing systems can reduce labor costs and improve efficiency by allowing stores to update prices remotely rather than manually replacing paper labels throughout stores. The Food Industry Association has said electronic shelf labels can improve pricing accuracy and streamline operations across grocery chains. Supporters argue that those operational savings could eventually help stores offset rising labor and supply-chain costs and keep some prices lower for consumers.

Real-time discounts could be used to move overstocked products

Retailers could use AI-powered pricing systems to use real-time pricing technology to lower prices on products that are overstocked or selling slowly. The electronic pricing systems allow stores to respond more quickly to inventory conditions by triggering temporary discounts or flash promotions when products are not moving fast enough. This could help lower costs for consumers while also reducing inventory losses for stores.

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This story was originally published May 28, 2026 at 3:06 PM.