Kroger, the biggest supermarket chain in the country, teamed up with Microsoft to seek out facial recognition in stores-claimed as offering them a more personal way of shopping. However, its testing became extremely contentious for ethical and privacy reasons, cited in wide public protest. Critics contend such technology could fuel discriminatory pricing, data misuse, and upticks in general surveillance.
The Kroger-Microsoft project would use facial recognition to create ‘personalised in-store experiences’. It might recognize customers and their shopping pattern when they stepped inside a store or, quite prospectively, revise prices based on customer profiles. Under the concept coined as dynamic pricing, it means there could be potential situations where different shoppers are looking at different prices for the very same product simply because of data variables like loyalty status, their purchase history-or even demographics, for that matter.
It extends Kroger’s technology investments, such as ESLs-its prices in stores can now be changed in real time. The firm announced an investment in AI company IntelligenceNode toward the end of 2024 to ramp up its pricing and polishing, continuing its move into automation and AI-driven personalization.
But despite Kroger’s assurance that the technology’s aim is to improve the in-store shopping experience, the public and lawmakers have taken an adverse reaction. Social media platforms have filled with an outpouring of criticism; users called the initiative “surveillance capitalism” and “corporate greed.”
One X user reacted, “No Kroger for me then. That’s a violation of basic decency and privacy.” Another warned, “We wanted flying cars and got AI racial profiling.
Other lawmakers who have come out in opposition to this move include Senators Elizabeth Warren and Bob Casey, and Representative Rashida Tlaib. In an October 2024 letter to Kroger’s chief executive, Tlaib raised concerns that facial recognition technology could result in discriminatory pricing and even consumer exploitation. Warren and Casey further echoed these apprehensions, suggesting AI-driven pricing policies could exacerbate existing economic inequalities while disproportionately harming lower-income shoppers.
Kroger has always denied having plans to use facial recognition for price discrimination. The company stated that its business model is premised on lowering prices to attract customers, not jacking up costs based on individual profiles.
Microsoft clarified that Kroger is not using its facial recognition technology. The tech giant also pointed out that the digital price tags currently in use are different from those piloted in 2019, thus confirming that no surge pricing model is in place.
This is not the first time Kroger has come under scrutiny over its practices regarding the use of technology. The launch of digital price tags as early as 2018 sparked speculation of surge pricing. More recently, the deal with IntelligenceNode sparked suspicion of AI-powered price adjustment calls by lawmakers for greater transparency.
Kroger’s foray into facial recognition is part of a broader retail automation trend where AI and machine learning are rapidly changing how businesses interact with consumers. Companies say the technology makes life easier and more efficient, while critics say it erodes consumer privacy and worsens economic inequity. Debate after debate, the role of AI in retail remains highly controversial. Yet to be decided is whether facial recognition should be allowed in supermarkets or whether AI-driven personalization will ultimately prove beneficial or injurious to consumers.