Will Kroger’s New Facial Recognition Software Lead to Surge Pricing?
As Kroger plans to implement facial recognition software throughout its grocery stores, one Michigan lawmaker is raising a red flag, saying that the use of such technology could lead to surge pricing.
The warning comes just months after we learned that Kroger officials admitted that the grocery chain had raised the price of eggs and milk "beyond inflation levels." In an email to other Kroger executives, the chain's Senior Director for Pricing Andy Groff said "On milk and eggs, retail inflation has been significantly higher than cost inflation."
A New Concern over Surge Pricing
In a letter to Kroger CEO Rodney McMullen, Michigan Congresswoman Rashida Tlaib raised concerns that the use of facial recognition software could potentially lead to pricing discrimination.
“Studies have shown that facial recognition technology is flawed and can lead to discrimination in predominantly Black and Brown neighborhoods,” Tlaib wrote in the letter, which was posted on social media Tuesday. “The racial biases of facial recognition technology are well documented and should not be extended into our grocery stores.”
SEE ALSO: Concerns Grow That Electronic Shelf Tags Could Lead to Surge Pricing
This raises the concern that Kroger could use the software to build individual profiles on customers based on demographics and shopping habits.
Kroger Issues a Response
CBS Detroit reports that a Kroger spokesperson issued the following response:
"Kroger's business model is built on a foundation of lowering prices to attract more customers. Everything we do is designed to support this strategy, and customers are shopping more with Kroger now than ever because we are fighting inflation and providing great value. To be clear, Kroger does not and has never engaged in 'surge pricing.' Any test of electronic shelf tags is designed to lower prices for more customers where it matters most. To suggest otherwise is not true."
Kroger is the largest grocery chain in the US, with 120 stores in 82 cities in Michigan.
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