Experts say AI may change the price of food and groceries: What is good and bad for customers

Food retailers are rapidly adopting artificial intelligence (AI) to run their operations. While the technology promises inventory efficiency and targeted discounts, economists and legal scholars warn it could also usher in an era of personalised and dynamic pricing – fundamentally altering what shoppers pay for everyday essentials.How AI is entering the grocery aisles and popular food chainsAccording to CNBC, retailers worldwide are testing and expanding data-driven systems at multiple touchpoints. US grocer Kroger introduced FlashFood, an AI platform that spots perishable items nearing their expiration dates, reduces their prices, and notifies shoppers via an app. Major chains in the US, including Kroger, Walmart, Whole Foods and Amazon Fresh are also rolling out digital screens to replace paper price tags, as are UK grocers Tesco, Morrisons and Asda. These digital tags enable stores to update shelf prices remotely in seconds.Financial platform Revolut recently tested facial-recognition checkouts at select coffee shops, letting buyers pay with a glance. In the UK, Sainsbury’s launched “SmartLists,” an AI tool that converts photos or meal ideas into curated shopping lists.Recently, an antitrust lawsuit accused McDonald’s of using an AI-driven “pricing engine” to determine menu rates across US stores and allegedly overcharge customers for staples like Big Macs and french fries. McDonald’s denied using AI to calculate what individual customers are willing to spend, asserting that it merely offers franchisees "tools, resources, research and recommendations to help them make informed decisions."What experts say about dynamic pricingAs automated infrastructure expands, experts caution that retailers have the tools to adjust pricing in real time based on demand patterns.“Dynamic pricing means changing prices in response to changing market conditions, such as demand, timing, capacity or competitors’ prices. It is not new. Airlines, hotels, and ride-hailing services have used it for years,” Miroslava Marinova, senior lecturer of commercial law at the University of East London, was quoted as saying.However, the rapid collection of granular personal data, which includes purchase records, browsing history, device location and buying routines, is beginning to blur the lines between broad market shifts and personal profiles.“Dynamic pricing responds primarily to market conditions, whereas personalised pricing uses information about the consumer to estimate willingness to pay. As retailers combine market-level information with increasingly detailed consumer data, the boundary between dynamic and personalised pricing becomes thinner,” Marinova explained.What is good and bad for shoppersAlgorithmic pricing is not inherently harmful to household budgets, the report said. Algorithms can lower prices on overstocked or aging inventory, curbing food waste and offering cheaper options for budget-conscious buyers. As a result, when discounts are applied strategically, certain foods and grocery services become more accessible to lower-income segments.However, there are some risks involved. The downside of individual-level pricing models centers on transparency and market fairness. When prices fluctuate continuously, shoppers cannot tell whether a price tag reflects general market supply or their personal browsing profile.“If consumers cannot understand why they received a particular price, cannot compare it with prices offered to others, and cannot effectively switch to another supplier, the normal disciplining effect of consumer choice becomes weaker,” Marinova warned.The Bank of England economists pointed out that when prices change constantly and differently for every shopper, measuring inflation becomes difficult.You use AI every day. Now get your AI Quotient. Take the AIQ test.