By Jennifer Williams

Shoppers in Norway are used to seeing prices at the grocery store change in front of their eyes. On electronic labels that line the shelves, the listed price for eggs or milk fades, the screen blinks and a new figure flashes up, all in a matter of seconds.

Prices can change up to 100 times a day at Reitan's REMA 1000-branded grocery stores across Norway -- and more often during holidays. The idea is to match or beat the competition with the touch of a button, says REMA 1000's head of pricing, Partap Sandhu. "We lower the prices maybe 10 cents and then our competitors do the same, and it kind of gets to [be] a race to the bottom."

It is a matter of time before Americans also see dynamic pricing on groceries, industry experts say. "All one has to do is visit the Netherlands or Norway," says Ioannis Stamatopoulos, an associate professor who studies retail technology at the University of Texas at Austin's business school. "That's a window to the future."

The prospect has raised alarms among U.S. lawmakers and consumers who fear electronic shelf labels in grocery stores will open the way for prices to go up as well as down -- and even unleash surge pricing in the aisles.

U.S. retailers have had electronic shelf labels for some years but their more recent use in grocery stores, including Walmart, Kroger and Whole Foods Market, has caught particular attention. Lawmakers last year sent a letter to Kroger, raising concerns that the company's use of digital price tags could allow stores to raise prices for goods at busy shopping times or during weather events. "Widespread adoption of digital price tags appears poised to enable large grocery stores to squeeze consumers to increase profits," said the letter from Massachusetts Sen. Elizabeth Warren and Pennsylvania Sen. Bob Casey, both Democrats. Casey left office this year.

Other elected officials have sought to limit or ban the use of the electronic labels. The issue has caused angst on social media, with visions of prices jumping for party supplies during holidays or ice cream suddenly getting more expensive on a hot day.

Kroger says it doesn't plan to use electronic price tags for dynamic pricing. "They are a great way to take manual shelf tagging work off our associates' roles so they can have more time to work with our customers directly -- and it's a huge reduction in the paper waste generated by tags," a company spokesperson said. Whole Foods, which is piloting electronic price labels in select stores, said it has no plans to use them for dynamic pricing or surge pricing.

Grocery stores have long used paper stickers to mark down meat, baked goods and other items as they reach their sell-by dates. While the digital systems are expensive, companies say they can ultimately save time and money by decreasing the labor needed to print out and place new price stickers.

Still, many consumers hear "dynamic pricing" and think of the surge pricing they see when hailing an Uber, buying concert tickets or booking a flight. When Wendy's then-CEO Kirk Tanner announced plans last year to test dynamic pricing and invest in the rollout of digital menu boards, it brought a backlash, with posters on social media raising the prospect of sky-high hamburger costs during peak demand times. Wendy's said its plans were misconstrued and that it wouldn't raise prices at the busiest times, but instead offer discounts when business was slow.

"When you say dynamic pricing, the hair on the back of my neck kind of stands up," says Joel Rampoldt, the CEO at Lidl US, part of the Germany-based grocery giant. "You see an electronic shelf label and the thought is going to occur to you, 'Well this is a way to raise prices more efficiently and more quickly and to take advantage of situations,' " he says.

Lidl US introduced electronic shelf labels in its stores last year to save time and display more consistent pricing, Rampoldt says. The plan is to outfit all of its nearly 190 U.S. stores by the end of the summer. Intraday price changes using the digital shelf labels aren't under consideration, he says. When items are marked down, usually near expiration, this is done manually with stickers. Outside the U.S., Lidl's stores use the electronic shelf labels to make price changes during the day, but they are only reductions aimed to fight food waste, the company said.

Walmart has digital shelf labels in more than 400 of its nearly 4,600 U.S. stores, with plans to get to half of locations soon, Cedric Clark, Walmart's executive vice president of U.S. store operations, said at a retail conference in January. For store employees, the electronic tags could be a time saver, he said: "Imagine just pulling out your phone, and about two clicks in, when it's time to actually change those prices...just hit that button." Walmart declined to comment further.

Fears of surge pricing are likely overblown, says Stamatopoulos, the UT professor. A recent study he authored along with Robert Evan Sanders at the University of California, San Diego, and Robert Bray of Northwestern University, found that electronic shelf labels haven't led to demand-based pricing in U.S. grocery retail, despite regulators' concerns.

One reason is that it is hard to detect a real-time surge in demand for goods in the store aisles, Stamatopoulos says. Another is that retailers know shoppers would take their business elsewhere if prices for items in the cart were higher by the time they made it to a store checkout. "They're very, very sensitive not to piss you off," he says.

As digital labels spread to U.S. stores, American consumers will likely see price changes as they shop in the future, says David Bellinger, a senior analyst at Mizuho Financial Group who covers retailers. He expects the changes will be infrequent or outside of store hours to avoid confusing or upsetting shoppers, and says they should primarily only go down: "Up would probably cause a lot of problems."

In June, U.K. lawmakers pressed directors from U.K. grocery companies Tesco and J Sainsbury on whether electronic shelf labels could be used for surge pricing. Members of the U.K.'s parliamentary Business and Trade Committee cited cases in France where prices for barbeque-related products purportedly rose with the temperature. Both chains, which are testing the digital shelf tags, said they don't do surge pricing and have no plans to.

Albert Heijn's roughly 1,280 grocery stores in the Netherlands and Belgium provide a glimpse of how the system works. Employees flag items that are about to expire, which prompts the electronic in-house pricing system to check every 15 minutes how they are selling and whether further discounts are needed. Prices on any one item are cut a maximum of four times in a day, with discounts starting at 25% before expanding as needed to 40%, 70% and finally 90%. The strategy helps the chain save around 250,000 kilograms (550,000 pounds) in food waste every year, says Noortje van Genugten, vice president of product operations at Albert Heijn, owned by grocery conglomerate Ahold Delhaize.

One surprising discovery, van Genugten says: "Customers need the sticker." When digital shelf labels were introduced, the assumption was that an electronic label showing two numbers -- the regular price and a discounted price -- would be enough to indicate a sale. "But then the customers didn't buy anything anymore," she says. Now the store uses a red-and-blue paper sticker to indicate an item has been marked down, and customers see the actual discount on the electronic shelf label.

At REMA 1000, digital shelf labels were introduced in 2012 as a way to more easily cut prices to beat the competition, Sandhu says. At first, price adjustments were made once a month, gradually becoming once a week, then every other day -- to now anywhere from 20 to hundreds of price changes in a day, depending on the time of year.

Nearly all of REMA 1000's price changes are set on a national basis rather than store-by-store. While a store can carry up to 5,000 items, the cuts tend to hit between 50 and 300 items in a given day, concentrated on seasonal items. The tags are connected to the store's system so that shoppers pay whatever is on the electronic shelf label when they are checking out, even if the price changed while they were shopping.

Other than beating the competition, the primary rule on intraday price changes is that shoppers should only see price cuts, never increases, Sandhu says. Any price hikes are done overnight, when shoppers aren't in the stores.

Write to Jennifer Williams at jennifer.williams@wsj.com

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July 27, 2025 20:00 ET (00:00 GMT)

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