Blink and cost of milk is different: Uber surge tech now in supermarkets

Business Standard

29-07-2025

Imagine you go to a grocery store, reach for a carton of milk, and by the time you put it in your cart, the price has changed. Not because of a special sale or a cashier's mistake, but because the price tag itself is now a tiny digital screen that updates in real time, multiple times a day.
That's not science fiction. It's already happening across supermarkets in Europe and the United States, where electronic shelf labels (ESLs) are replacing paper tags. These dynamic digital labels are quietly revolutionising grocery pricing — and possibly introducing a future of real-time 'surge pricing' for basic staples.
According to a report published by T he Wall Street Journal, ESLs are already in use at several major US chains and allow grocers to change prices up to 100 times a day. Retailers say the shift from traditional paper tags helps reduce labour costs and paper waste, while enabling faster markdowns on perishables. However, the same infrastructure raises the possibility of surge pricing, price increases during high-demand periods, prompting concerns from regulators and shoppers.
How retailers are using dynamic digital pricing
In Europe
In Norway, REMA 1000 uses ESLs to make real-time pricing adjustments in order to stay ahead of competitors. The Wall Street Journal reported that prices on certain items like milk or eggs may change dozens of times a day, especially around holidays.
In the Netherlands, Albert Heijn, part of Ahold Delhaize, uses ESLs in over 1,200 stores. The system monitors near-expiry items every 15 minutes, discounting them up to four times daily—starting at 25 per cent and going up to 90 per cent—to minimise food waste. The company estimates this has reduced waste by over 250,000 kg annually. However, despite the tech, stores occasionally still use physical stickers because early trials showed customers often missed digital discounts.
In the United States
Walmart has deployed ESLs in more than 400 of its nearly 4,600 stores and plans to expand to cover half of its locations.
Kroger and Whole Foods are piloting ESLs.
Lidl US began rolling out ESLs in 2024.
In India: Dynamic pricing is limited to transport, hospitality
In India, surge pricing is restricted in certain sectors. The Ministry of Road Transport and Highways recently issued the Motor Vehicle Aggregator Guidelines, 2025, which permits cab aggregators like Uber, Ola, and Rapido to charge up to 2x the base fare during peak hours. The updated guidelines are an expansion from the previous limit of 1.5x.
There is no equivalent model for dynamic pricing in retail or grocery stores. Real-time pricing tools such as ESLs are not yet widely adopted in Indian grocery stores.
Why lawmakers and consumers are worried
The potential for real-time price increases on consumer staples has raised red flags among policymakers and consumers:
In the US, Senators Elizabeth Warren and Bob Casey (now retired) wrote a letter in 2024 to Kroger expressing concern that digital tags could allow for price manipulation during holidays or natural disasters. The letter warned that ESLs 'appear poised to enable large grocery stores to squeeze consumers to increase profits".
In the UK, Members of Parliament questioned grocery chains Tesco and Sainsbury's about surge pricing technology after reports from France indicated that prices for barbeque items rose alongside outdoor temperatures.
Public reaction on social media has also reflected broader anxiety, with many users speculating whether essential products might soon fluctuate in cost throughout the day.
What is surge pricing?
Surge pricing—also referred to as dynamic or demand-based pricing—is a strategy where prices fluctuate in real time based on demand levels. It is commonly used in ride-sharing, hospitality, and e-commerce.
In the ride-sharing industry, platforms such as Uber and Lyft use this model to match driver availability with passenger demand, especially during rush hours or public events.
Hospitality providers, including hotels and rental services, use similar mechanisms to adjust room rates during peak travel seasons.
E-commerce platforms also employ dynamic pricing during flash sales or product launches to balance inventory and maximise revenue.
What retailers are actually doing with ESLs
Despite the concerns, retailers have been clear about the current uses of ESLs:
The main objective is to save labour by eliminating manual price changes and reducing environmental impact by cutting down on paper tags.
Most grocers, including those in Europe and the US, state that price reductions—especially for near-expiry goods or to match competitors—are the primary use.
According to REMA 1000 and Lidl, any price increases are done overnight to avoid confusing or upsetting customers.
Will surge pricing really come to the grocery aisle?
So far, there is no concrete evidence that US grocery retailers are using ESLs for demand-based pricing.
According to a McKinsey & Company report, real-time analytics and predictive modelling are increasingly enabling such pricing strategies across sectors. A 2021 report stated that dynamic pricing" doesn't necessarily require ultrasophisticated software that changes every product's price multiple times a day". Adding that even traditional retailers can benefit from "merchant-informed, data-driven algorithms that recommend price changes for selected products at some level of frequency".
However, a study by researchers from UT Austin, UC San Diego, and Northwestern University added that real-time surge pricing, especially in physical stores, is unlikely due to two key constraints:
In-store demand is difficult to track at the necessary granularity for algorithm-driven pricing.
Customer sensitivity to price shifts is high. Shoppers may abandon purchases if prices increase before they reach checkout.
What comes next for grocery pricing?
While real-time price hikes remain rare, ESL adoption is expected to expand:
More US grocery chains are likely to introduce the technology to streamline pricing operations.
Intraday price reductions—especially on perishable or seasonal items—are expected to increase in frequency.
Price increases during active shopping hours are still considered unlikely due to reputational risks and customer trust concerns.
Fast food sector also experimenting with surge pricing
Last year, fast-food chain Wendy's announced plans to test a dynamic pricing model for menu items in 2025. Under the proposed model, prices would vary during the day based on demand; however, it clarified that they would not raise prices during peak hours. While the company said that the rollout would begin as a test, as of July 2025, no surge pricing has been implemented.
Following the announcement, Gizmodo conducted a survey that found that 52 per cent of respondents equated surge pricing with price gouging, while 65 per cent said it would complicate food purchasing decisions.
The bottom line
Electronic shelf labels are giving retailers unprecedented control over pricing and operations. So far, they are mainly being used for efficiency gains and markdowns, not for surge pricing. However, as the technology becomes widespread and as other industries explore real-time pricing models, the conversation around transparency, fairness, and digital automation in pricing is set to intensify.