KROGER, one of the country’s largest supermarket chains, is facing fierce consumer backlash—and a regulatory investigation.

Two senators have announced they are investigating the chain’s practices amid allegations that the chain may be using personal information to “gouge prices” in stores.

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Surge pricing, the colloquial term for “dynamic pricing,” means that a company increases its service prices based on real-time demand. Ride-sharing companies Uber and Lyft, which set their prices based on driver availability, are known for using such a system.

Now Kroger is under fire after some claimed the company’s electronic labels could be used to increase the prices of goods.

In response to consumer fears, Senator Elizabeth Warren of Massachusetts and Senator Bob Casey of Pennsylvania are launching an investigation into the company. The two Democrats have sent a letter to the company’s CEO asking for clarification on how the company will use the technology.

“The widespread introduction of digital price tags will apparently enable large grocery stores to squeeze consumers to increase their profits,” the letter said.

Concerns were also raised about a partnership with Microsoft and an AI company, fearing that the company could collect personal data to determine how much each customer is willing to pay.

Kroger representatives have strongly denied the allegations of price gouging.

“Kroger’s business model is to lower prices over time so more customers shop with us, which leads to more revenue, which we then invest in lower prices, higher wages and an even better shopping experience,” a spokesperson told Fox Business.

“Any trial of electronic shelf labels is intended to lower prices for customers where it matters most,” the statement continued. “To say otherwise is untrue.”

PRICE TAG CHANGES

Much of the fear of price gouging revolves around the store labels that Kroger has been implementing since 2018.

Electronic shelf labels (ESLs) are designed to reduce the time employees spend updating prices – currently a time-consuming process that requires new signs to be created and applied manually.

The goal is to save companies labor costs – savings that could be passed on to consumers.

ESLs are also being introduced in stores like Walmart, bringing greater attention to the technology.

Many are concerned that the ease with which stores can change their prices could lead to price gouging.

In theory, a store like Kroger could raise grocery prices in emergency situations to make big profits, a practice that is banned in most states. The letter also suggested more benign possibilities — such as raising the price of turkeys before Thanksgiving or ice cream prices on a hot day.

In February, Kroger partnered with an AI company that offers dynamic pricing as one of its services.

Companies like Kroger and Walmart insisted that ESLs would not be used to raise prices, but Senators were not convinced.

“It is outrageous that grocery giants like Kroger continue to implement price spikes and other profiteering schemes while families continue to struggle to afford food,” the letter said.

The senators did not present any concrete evidence that Kroger actively used price increases.

They listed 11 questions that senators would like Kroger’s CEO to answer by August 20.

It is not clear if and when the answers will be published.

This move comes as Vice President Kamala Harris attempts to blame high inflation at least in part on corporate greed ahead of the November election.

BUYERS REACT

Some customers do not even wait for the CEO’s answers and instead expose the company by accusing it of price gouging.

“Absolutely disgusting,” said one X user. “I’ve never been to Kroger and never will again, no matter where I end up in life.”

They called it “greedflation.”

This has become a common topic of conversation on the Internet, although some economists believe that corporate profits are not a major factor in inflation.

“This is so disgusting and disturbing to me,” said another.

Others expressed particular concern that personal data could be misused to set store prices.

It remains unclear whether Kroger intends to do so.

The US Sun contacted Kroger for clarification.

Inflation nation

Although inflation has cooled, high prices continue to weigh on American consumers.

This has increased fears of price gouging.

Wendy’s recently faced heavy criticism over an apparent plan to introduce dynamic pricing in its restaurants.

The company quickly changed course, although criticism continued.

Walmart also faced headwinds over its use of ESLs.

Although the company was mentioned by name in the letter, Warren and Casey focused on Kroger.

Lyft’s CEO has announced plans to back away from the price increase.

Check out the latest inflation figures.