Digital price labels, which are rapidly replacing paper shelf tags at US supermarkets, haven’t led to demand-based pricing surges, according to a new study that examined five years’ worth of prices at one grocery chain.
But some shoppers, consumer advocates and lawmakers remain skeptical about the tiny electronic screens, which let stores change prices instantly from a central computer instead of having workers swap out paper labels by hand.
Social media is filled with warnings that grocers will use the technology to charge more for ice cream if it’s hot outside, hike the price of umbrellas if it’s raining or to gather information about customers.
Lawmakers have introduced bills to limit the use of digital labels. In Arizona, Democratic state Rep. Cesar Aguilar recently introduced a bill that would ban them altogether. Aguilar said he’s determined to start a conversation about digital labels and how stores could abuse them.
Researchers say those fears are misplaced. A study published in late May found “virtually no surge pricing” before or after electronic shelf labels were adopted. The study also determined that discounts were slightly more common after digital labels were introduced.
Economists have long wondered why grocery prices don’t change more often. Here’s one reason: Shoppers watch grocery prices closely, and stores don’t want to risk angering them.
Companies say electronic price labels have tremendous advantages. Walmart says it used to take employees two days to change paper price labels on the 120,000 items it has in a typical store. With digital tags, it takes a few minutes. The labels can also be useful. Some have codes that shoppers can scan to see recipes or nutrition information.
Aguilar, the Arizona lawmaker, said he also opposes the transition to digital labels because he thinks they will cost jobs.
But Relex Solutions’ Amanda Oren said she doesn't think cutting labor costs is the main reason stores deploy digital price tags. “It’s about working smarter, not harder, and being able to use that labor in better ways across the store rather than these very mundane, repetitive tasks,” she said.
This article was provided by The Associated Press.