This week a federal antitrust complaint landed on McDonald's doorstep, alleging the chain relies on an AI driven "pricing engine" to establish menus across its U.S. outlets and that customers paid more for Big Macs and fries. McDonald's pushed back, saying it is not deploying AI to figure out what any particular customer is willing to pay, and that it provides its franchisees with "tools, resources, research and recommendations to help them make informed decisions."
Grocers are wiring up their stores with data tools. Earlier this year, Kroger said it uses an AI tool called FlashFood to mark down perishable goods nearing expiration and to advertise those deals in its app. Electronic shelf labels are spreading at chains like Kroger, Amazon Fresh, Walmart, and Whole Foods, making it easier to update prices in stores.
The trend is global. U.K. supermarkets including Tesco, Morrisons, and Asda are adopting electronic shelf labels, and Revolut recently piloted pay-by-face checkout in certain coffee shops so customers could pay with a glance. On Wednesday, Sainsbury's rolled out SmartLists, an AI feature that builds shopping lists and helps customers find products from uploaded photos or typed meal ideas. CNBC contacted Amazon Fresh, Whole Foods, Tesco, Morrisons, Asda and Revolut about their AI use and did not receive immediate responses.
Walmart and Kroger have publicly said in recent years they steer clear of dynamic or surge pricing and do not set person-specific prices, describing their tools as focused on streamlining operations.
Pricing algorithms are drawing legal scrutiny across whole industries. Market Briefs covers that risk free every morning.
As retailers normalize AI, experts see a greater risk of dynamic pricing, where prices change quickly and frequently in response to conditions. "Dynamic pricing means changing prices in response to changing market conditions, such as demand, timing, capacity or competitors' prices," said Miroslava Marinova, a senior lecturer at the University of East London in commercial law. "It is not new. Airlines, hotels, and ride-hailing services have used it for years."
In April, Bank of England economists Clare Lombardelli and Rupal Patel observed that advances in technology are making prices adjust more frequently and become more tailored to individuals, which could lead to more firms charging "as close to the maximum price a consumer is willing to pay for a good or service," which they defined as "perfect price discrimination."
That shift also complicates inflation tracking. They noted that it becomes harder to "measure and interpret" month to month inflation when the CPI relies on a representative basket. "That works well when prices mostly move slowly and uniformly. But when prices shift continually - and differently for each shopper - the idea of a 'representative' price becomes strained," they said.
AI and digital tools expand what companies can learn about you, from purchase histories and browsing behavior to location and shopping patterns. Marinova said this helps blur lines between pricing approaches. "This is also why the traditional distinction between dynamic and personalised pricing is becoming less clear in practice," she explained. "Dynamic pricing responds primarily to market conditions, whereas personalised pricing uses information about the consumer to estimate willingness to pay." As firms mix market level data with granular customer information, "the boundary between dynamic and personalised pricing becomes thinner," she added.
Some U.S. regulators are trying to get ahead of this. New York now obliges most businesses that leverage customers' personal data for pricing to make that use plainly disclosed. Maryland has restricted food sellers and delivery apps from using personalised, data driven pricing to levy higher prices on certain food, and New Jersey and Connecticut have put in place rules aimed at "surveillance pricing."
For shoppers, the impact is mixed. Marinova noted that dynamic and personalised pricing can make some goods cheaper for some people. The risk is transparency. "That makes it much harder to compare prices and to know whether another consumer is being offered a different price for the same product," she said. If consumers cannot tell why they got a price, cannot compare it to others, and cannot easily switch, "the normal disciplining effect of consumer choice becomes weaker."
The BOE economists warned that personalized pricing "splinters the consumer experience," so households may see increasingly different inflation rates. "And when prices differ for the same thing, inflation becomes even more personalised - and aggregate measures may no longer reflect households' experience," they said.
Bottom line for your budget: more prices could update in the background, and the sticker you see might not be the sticker your neighbor sees. Keep an eye on how stores present prices and disclosures, because the way prices are set may matter as much as the number on the tag.
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