Proposed by Mayor Katie Wilson and Councilmember Alexis Mercedes Rinck, the legislation will require grocery stores with more than 20 locations worldwide to stop using personal data to set individualized prices and discounts. It would also apply to third party delivery apps such as Instacart, as well as mixed-used stores like Target.
The idea that grocery companies are charging different people different prices based on their past purchases sounds like a futuristic dystopia. But it’s not far off. The practice isn’t in brick and mortar stores yet, but it’s a widespread reality for online shopping. And they’ve already been hoarding your data for years.
Back in 2019, the marketing arm of Kroger, the supermarket giant that owns QFC and Fred Meyer, boasted about collecting more than 2,000 data points on customers using past purchasing history and information bought from data brokers. That data will feed the new pricing algorithms.
Those algorithms are designed to estimate a customer’s purchasing power and how willing they might be to pay more. As part of a Consumer Reports study last year, 39 volunteers loaded up virtual Instacart baskets of products from a Seattle Safeway store. They received a range of prices from $114 to $124 for the exact same goods. That study estimated that this type of price manipulation, if applied to a family of four, could result in cost differences as high as $1,200 a year.
While currently algorithmic pricing is mainly limited to online shopping and loyalty apps, it’s right around the corner for brick-and-mortar stores with the introduction of electronic price labels, which allow stores to instantly change prices of goods. The city council ordinance will require these labels to be the same for different customers.