What is surveillance pricing and is it coming to a grocery store near you?
Walmart Inc. is planning to roll out digital price tags in all its U.S. stores by year’s end, but some U.S. lawmakers and groups fear the technology could serve as a gateway for predatory pricing strategies. In Canada, where many big grocers have already deployed these electronic shelf labels, citing improved efficiency and accuracy, there have been calls for a ban on so-called surveillance pricing, the practice of using personal data to set individualized prices. Here, Financial Post breaks down what surveillance pricing is, how it differs from dynamic pricing, and why people are worried about it now.
What is surveillance pricing?
Surveillance pricing, or algorithmic personalized pricing, is a way of setting prices in which information about individual customers — from scraped social media activity to other identifying factors such as where they live or their spending habits — is used to generate prices. The concern about the practice is that it leads to different prices for different people, potentially exploiting their circumstances or need for a product.
Surveillance pricing has been used in e-commerce settings in different forms for years, said Vass Bednar, managing director of the Canadian Shield Institute, a public policy think-tank, especially when shopping through an app or with a loyalty program, where a company is obtaining information about customers and making predictions about their willingness to pay. While this has been difficult to determine in Canada, a U.S. Federal Trade Commission study indicates some retailers have used personal data such as a consumer’s location or browser history to set individualized prices.
Surveillance pricing is sometimes confused with dynamic pricing, or price updates that vary depending on factors such as higher demand or squeezed supply. Examples include more expensive ski lift passes, hotel rates and airline fees during vacation periods, or sliding Uber ride and concert ticket prices, depending on demand. In these cases the prices changes in different circumstances, but all customers receive the same price.
In 2022, grocery delivery platform Instacart (operated by American tech company Maplebear Inc.) acquired AI-powered pricing and promotions platform Eversight, touting the platform’s “deep expertise in dynamic pricing strategies,” which would allow retailers and brands to test individualized and customized pricing and promotions.
An investigation conducted by Groundwork Collaborative, Consumer Reports, and More Perfect Union last year found that nearly three-quarters of grocery items were offered to shoppers at different price points on Instacart. The report said the average difference between the lowest and highest price was 13 per cent, though some shoppers found grocery prices that were up to 23 per cent higher.
In December, Instacart announced it was ending “all item price tests.”
“These tests were not dynamic pricing or surveillance pricing – and were never based on supply or demand, personal data, demographics, or individual shopping behavior,” the company said in a business update.
It is the use of individualized data that turns dynamic pricing into surveillance pricing.
Why are people talking about it now?
Digital price tags, or electronic shelf labels, appear on small LCD screens or e-paper and get updated wirelessly from a central system.
Canadian grocers have said this technology improves efficiency and accuracy for price updates, such as for discounts and promotions, and frees up employee time.
Automating the process could even allow specific discounts for, say, freshly baked goods at the end of the day, to get instantly updated at a set time, said Viet Vu, manager of economic research at Toronto Metropolitan University’s think tank, The Dais. That technology is not being used in stores yet, he added.
But the concern is how digital labels could affect the speed of, or data used for, price changes, Bednar said.
“Firms have always had pricing power — that’s not going away,” Bednar said. “But they’re being less transparent with how they’re setting and calibrating prices.”
Walmart Inc. recently introduced electronic price tags in the United States, with reports they are in some Canadian Walmart stores. This prompted concerns from U.S. lawmakers and some groups that the technology could possibly facilitate surveillance pricing.
What is Walmart doing and what has been the response in the U.S.?
Walmart is deploying digital shelf labels developed by Vusion Group across its entire fleet of 4,600 U.S. stores this year. The big-box retailer said the technology will enable employees to update prices using a mobile app, signal shelves that require stock replenishment with flashing LED lights and speed up the process and improve accuracy for online delivery orders.
However, some U.S. state and federal legislators have introduced legislation that, if approved, would affect the use of these electronic labels.
The Stop Price Gouging in Grocery Stores bill, introduced last year, would bar large food retailers in the U.S. from using digital shelf label technology, prohibit surveillance pricing (with exceptions for promotions such as senior or student discounts) and require disclosure of the use of facial recognition technology — which it said could be used to collect personal information about a consumer to adjust prices.
In February, the United Food and Commercial Workers International Union (UFCW), which represents 1.2 million essential workers across the U.S. and Canada, launched the Affordable Groceries and Good Jobs Campaign, to ban surveillance pricing and deliver fair prices in grocery stores.
UFCW Canada said in an email that electronic shelf labels “enable corporations to change prices instantaneously, paving the way for surveillance pricing, dynamic pricing, and a range of predatory strategies.” The union said unregulated use of this technology allows stores to quietly switch prices depending on day, location, weather, time and events.
As for Canada, UFCW said that Walmart has placed electronic shelf labels in “hundreds of Canadian stores.” And Vusion announced that it would expand its electronic shelf labelling technology with Walmart Canada. Walmart and Walmart Canada did not respond in time to requests for comment before publication.
Records from the U.S. Patent and Trademark Office show that Walmart obtained two patents this year that could potentially incorporate more algorithm-based technology into its pricing strategy. In January, it obtained a “system and method for dynamically and automatically updating item prices” for its ecommerce platform and in March, it secured a patent that determines item demand and pricing using machine learning processes.
Vu said it does not appear that these patents rise to the level of individualistic or surveillance pricing that some politicians are concerned about but would rather allow dynamic pricing in stores to update prices en masse.
It is possible that Canadian grocers could start exploring such technology as well. Bednar said that while Canadian companies are typically slow to adopt productivity-enhancing technology, it is probable they will eventually “rip from the playbook” of retail giants such as Walmart.
Which Canadian grocers are already using digital price tags?
Many Canadian grocery store chains have already deployed this technology, including Loblaw Companies Ltd., Metro, Inc. and, most recently, Sobeys Inc., which is expected to have completed its rollout of five million electronic shelf labels across the country by the end of April following a one-year test run.
Loblaw’s public relations team said in an email that it introduced electronic shelf labels across its national grocery store network starting in 2018, and they are now fully implemented across Canada.
“For customers, they aren’t materially different from paper tags,” Loblaw said. “We’ve seen improved price accuracy, especially on sale items, as updates are applied consistently across all products overnight rather than manually.”
Vu said one concern about digital price tags is the potential for real-time price updates in response to supply and demand factors, or dynamic pricing.
In 2025, South Korean electronic shelf label provider SoluM Co Ltd. said it partnered with Loblaw. In a separate press release, SOLUM said that its implementation has been “particularly impactful in grocery environments where product turnover and price variability demand real-time responsiveness” and that its system supports dynamic pricing.
Loblaw said its pricing and promotional practices have not changed with its electronic labels.
Metro and Sobeys use electronic shelf labels manufactured by Swedish retail tech company Pricer AB and deployed by Montreal-based JRTech Solutions Inc.
Stephanie Bonk, communication manager at Metro, said in an email that the company has been rolling out electronic shelf labels for the past 10 years “to support price accuracy, efficiency, and consistency for customers,” adding that its pricing strategy has remained unchanged.
“In any particular store, pricing will not vary by customer, time of day, or demand — everyone in a store pays the same price for the same product,” said Emily Truesdale, a Sobeys spokesperson, in an email. “The use of electronic shelf labels is about clearer, more modern pricing displays — nothing more.”
As for fears of surveillance pricing, Vu said using such technology through electronic shelf labels would be complicated, as it would need to monitor where customers are physically present within a store and combine their personal data to set a specific price for them.
“I don’t think that future is (here), nor is it the possible future even in the next five to 10 years,” said Vu. “It is something that we should be watching out for as technology develops, but it’s not a real fear yet.”
What is being done about surveillance pricing?
Concerns over surveillance pricing entered the national political debate in April, when NDP leader Avi Lewis announced his party would table a motion at Parliament to ban the use of personal data to charge consumers different prices for the same products.
“Big Tech is teaming up with retailers, including grocery giants, to spy on Canadians and gouge them even more,” Lewis said during a press conference.
Though the federal motion was voted down, Manitoba’s provincial government brought forward proposed legislation in March that would prohibit personalized algorithmic pricing in both online and physical retailers. Saskatchewan’s NDP party proposed a similar bill in April, aimed at cracking down on corporations using personal data, profiling, or algorithmic systems to charge higher prices to individual consumers.
Vu doesn’t think enforcing a national ban on algorithmic pricing will be possible but called for stronger competition policy instead.
“The right solution here is to really focus on strong competition policy — let’s say, in the grocery sector, which has had chronic levels of under-competition — in order to ensure that Loblaws, or even Walmart, doesn’t think that doing real-time pricing will end up being profitable for them.”
Bednar said there could be ways to address algorithmic pricing concerns through existing legislation. For example, most provinces have price gouging laws in place, though there has been limited discussion about whether algorithmic pricing is a form of price gouging. There could also be a way for privacy laws to discourage companies from integrating multiple personal datasets or using aggregated data to segment pricing, she said.
Another possible avenue could be for the Competition Bureau to deem personalized pricing as a deceptive marketing practice or a form of double ticketing, she added.
Bednar said the lack of transparency around pricing strategies from companies means consumers can’t discipline the market by rejecting them or looking for alternatives.
“It’s not unreasonable for consumers to push for disclosure,” she said, adding this is especially true if grocery store prices start changing more frequently. “It’s worth talking about, especially if it’s going to become our new reality.”
• Email: slouis@postmedia.com