Portland Considers Banning Algorithmic Grocery Price Changes
City council is set to debate a measure that would cap how often digital shelf labels can update prices, aiming to prevent personalized pricing based on customer data.
Portland city council is preparing to hear a proposal that would limit the ability of grocery stores to change prices multiple times a day. The measure, sponsored by Councilor Eric Zimmerman, targets the emerging use of electronic shelf labels that allow retailers to update pricing remotely without physical sticker changes. If passed, the ordinance would restrict these adjustments to once per day and ban the use of individual customer data to set specific prices.
The proposal responds to concerns that dynamic pricing models, common in ride-sharing and aviation, are moving into the grocery sector. While traditional stores relied on manual price updates, new technology enables real-time adjustments based on factors like time of day, stock levels, or even weather conditions. Critics argue that without regulation, this technology could lead to higher costs for shoppers during peak hours or for those with specific spending profiles.
Personalized pricing faces legal restrictions
A key component of the draft ordinance prohibits retailers and delivery services from using personal data to set different prices for different customers. This directly addresses findings by Consumer Reports, which discovered that Instacart users sometimes saw price differences of up to 23% for identical items. The proposed rule would make such personalized pricing illegal in Portland, with limited exceptions for discount programs targeting seniors, veterans, or loyalty card holders.
Councilor Zimmerman stated that the goal is to ensure fairness in the marketplace. He noted that allowing technology to adjust prices based on individual consumer behavior rather than market forces creates an uncomfortable dynamic. The ordinance seeks to prevent a scenario where a shopper’s income or history directly influences the cost of basic necessities at the point of sale.
Technology enables rapid price shifts
Electronic shelf labels are already present in some Portland-area stores, including locations operated by Whole Foods and Walmart. These devices allow prices to be changed centrally and instantly. A report from the AFL-CIO Tech Institute highlights how manufacturers are already suggesting retailers use this capability to raise prices during high-demand periods. This could mean higher costs for allergy medications during pollen season or increased prices for popular items during busy shopping hours.
The shift away from static pricing is driven by the efficiency of digital updates. Unlike manual labor, which makes frequent price changes impractical, digital systems remove that barrier. This technological capability is the primary catalyst for the proposed regulation, as it allows for the kind of granular, real-time pricing that was previously impossible in the grocery industry.
State laws mirror federal concerns
Portland is not alone in addressing these issues. Maryland recently became the first state to restrict what is known as surveillance pricing, with a law taking effect in October that bars grocery stores from using personal data to set prices. Connecticut and New Jersey have passed similar legislation. New Jersey has also imposed a one-year moratorium on the installation of new electronic shelf labels while it studies their impact on consumers.
The Portland hearing, scheduled for September 22, will be the first step in the legislative process. The outcome will determine whether the city joins a growing number of jurisdictions seeking to regulate the intersection of retail technology and consumer privacy. The measure aims to balance the benefits of modern inventory management with the need for transparent and equitable pricing for all shoppers.
