American shoppers are frustrated by high prices and confused and angry about the technology behind them. Terms such as dynamic pricing and surveillance pricing are fuelling anxiety on social media, where users ask whether different people pay different prices for the same product. A retail consultant described major tensions over who will hold the power.
What retailers are doing
Digital price tags are replacing paper labels at chains including Walmart and Whole Foods. Walmart's chief executive, John Furner, wrote that the labels save workers time and keep prices current, and said they are not used to raise prices according to weather, time of day or individual shoppers. The company, he said, prices the product, not the person. A survey of more than 2,200 business leaders in 28 countries last year found that 41 per cent used AI to gather market intelligence, including competitors' prices, and 28 per cent used it for real-time price optimisation. A 2025 federal staff report found that firms selling pricing tools worked with at least 250 clients, including grocery and clothing retailers.
Researchers who studied an unnamed grocery chain found virtually no surge pricing after it adopted electronic shelf labels, and a web data company that tracked 2025 price changes found about half were decreases. A retail trade body says algorithmic pricing is a new tool for something retailers have always done, which is adjusting prices for supply, demand, seasonality and competitors. A retail software executive, Asa Farquhar, says shelf prices are usually updated on a regular schedule, often weekly, because shoppers value consistency.
The disputes
Several cases keep the suspicion alive. In 2022 California prosecutors sued Target, alleging its app showed lower prices before shoppers entered stores and higher ones inside. Target agreed to a $5 million settlement and a ban on using geofencing to raise prices, and says it does not personalise prices from guest data. Last year an investigation by consumer groups found Instacart shoppers were shown different prices for identical products at the same stores, and Instacart ended tests that randomly assigned shoppers to groups. The Federal Trade Commission's 2023 antitrust suit against Amazon targets an algorithmic tool codenamed Project Nessie, which the agency alleges generated more than $1 billion in excess profits. Amazon says the allegations grossly mischaracterise the tool and that it was scrapped after failing to work as intended. A consumer lawsuit alleges McDonald's pricing system uses nonpublic sales data from competing locations to coordinate prices; the company calls the suit filled with inaccuracies and says it offers the tool to US franchisees. A trial in the Amazon case is scheduled for next year.
Regulators and lawmakers
The Federal Trade Commission has proposed an enforcement policy warning that failing to disclose the use of personal data to set individualised prices could break consumer protection law. Legislators in at least 30 states considered pricing bills this year. Maryland, New Jersey and Connecticut have enacted limits on using shoppers' personal data to set what they pay. The Maryland and New Jersey laws focus on groceries and include exceptions for certain loyalty discounts, while Connecticut's covers a broader range of retail purchases.
