AI Could End the Price Tag as We Know It: How US Retailers Now Use AI to Set Prices

The price tag is dying. Not the concept of a price — but the little paper rectangle that used to sit quietly on a grocery shelf for weeks at a time. Across the United States, digital price tags are rapidly replacing paper ones in grocery aisles, and artificial intelligence tools are helping retailers decide what to charge by predicting how customers might respond. According to a new Associated Press report, shoppers are not just frustrated with high prices anymore — they are angry and confused about the increasingly high-tech ways those prices are being set.

Terms like "dynamic pricing" and "surveillance pricing" are now stirring real anxiety on social media, where shoppers wonder whether different people are paying different prices for the same product. Here is what is actually happening — and what the companies and the regulators say about it.

What "AI-assisted pricing" actually means

At its simplest, AI-assisted pricing means using software to decide what a product should cost, instead of a human manager with a spreadsheet. The tools analyse enormous amounts of data — past sales, competitor prices, time of day, weather, inventory levels — and recommend, or automatically set, prices that are supposed to maximise revenue.

Americans have grown used to this in some corners of life: flight tickets, hotel rooms and ride-hailing fares have changed price by the minute for years. What is new is the arrival of these techniques in everyday shopping — groceries, household goods, the items people buy without thinking twice.

The fear has a name: surveillance pricing — the idea that a retailer could use your personal data, your browsing history, your location or even your income level to charge you a different price than the person standing next to you in the checkout line. A 2025 staff report from the Federal Trade Commission found that pricing-tailoring tools were already being used by intermediaries working with at least 250 clients.

Why shoppers are worried

Katie Thomas, who leads a consumer-behaviour think tank at the management consulting firm Kearney, told the AP there are "major tensions happening right now between who's really going to have the power with some of these algorithms and usage of bots and AI: the companies or the shopper."

Part of the problem is opacity. Companies are not always transparent about what customer data they collect or how it feeds into pricing, which breeds suspicion — and then speculation. Some viral social media posts have falsely claimed that the electronic shelf labels Walmart plans to roll out across its US stores scan shoppers' faces or phones to set individualised prices. Those claims are not true, but they show how little trust remains.

The numbers back up the unease: one recent survey found that 57% of shoppers would trust a retailer less if they discovered a product's price had been adjusted based on their personal information or shopping behaviour.

What the companies say

Retailers insist much of the fear is based on misunderstanding. Walmart CEO John Furner wrote in a blog post last month that digital price tags save workers' time and keep prices accurate — and that the labels are not used to raise prices based on the weather, the time of day, or the individual shopper. "We price the product, not the person," he wrote.

Walmart has gone further in private correspondence, denying it is developing tools that would use a customer's personal information, income, shopping history or "willingness to pay" to set an individualised price, and insisting it does not engage in dynamic pricing at all.

But watchdog groups are not convinced. Research published this month by the Groundwork Collaborative claimed Walmart had applied for patents on technology that could compile detailed shopper profiles and use them to set individualised prices — technology that, in the researchers' words, could charge a customer "a different price than the customer in front of them in the checkout line." Walmart denies it.

The regulators are circling

Washington is watching. In August, the FTC put out a proposed enforcement policy on personalised pricing, warning that modern data collection could let businesses "set personalized prices based on analysis of consumers' personal data." Legislators in at least 30 states have considered bills this year addressing algorithmic and personalised pricing — and Maryland has already passed a law banning dynamic pricing at grocery stores outright.

Some companies are already retreating. Last December, Instacart said it would stop using AI to let retailers charge different prices for identical items on its platform.

The deeper shift may be on the shopper's side: a growing share of consumers now use AI tools like ChatGPT or Google Gemini to compare prices themselves — 24% already do, according to one survey, and 56% trust those tools to give accurate pricing information. The pricing war, in other words, is becoming an AI-versus-AI contest.

Whether the price tag survives in recognisable form is now an open question. What is not in question is that the quiet, fixed price of the supermarket era is gone — and shoppers have noticed. For more on how AI is reshaping industries, read our explainers on Intel's 700-TOPS AI chip bet and why patients don't trust AI doctors.

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