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Drudge Retort: The Other Side of the News
Saturday, August 10, 2024

Expressing doubt that a new artificial intelligence-powered "dynamic pricing" model used by the Kroger grocery chain is truly meant to "better the customer experience," Sens. Elizabeth Warren said Friday that the practice shows how "corporate greed is out of control."

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...and has been since the appearance of Covid.

#1 | Posted by Wardog at 2024-08-10 03:40 PM | Reply | Newsworthy 4

Quit Kroger for Publix a long time ago. Also like Aldi.

Walk into a Kroger and see unhappy employees and one cashier.

They're smiling at Publix. Likely because they're paid and treated better.

#2 | Posted by AMERICANUNITY at 2024-08-10 04:18 PM | Reply | Funny: 1 | Newsworthy 2

I am SO looking forward to going to the grocery store and seeing prices printed on the e-paper tags increase as I approach because my refrigerator told them which items i'm out of and desperately need to finish dinner.

#3 | Posted by AustinTX at 2024-08-10 06:01 PM | Reply | Funny: 1 | Newsworthy 1

Lock up the CEO and executives. That would stop the price gouging in profiteering real quick.

#5 | Posted by a_monson at 2024-08-10 08:09 PM | Reply | Newsworthy 1

I shop at Publix online but someone decided to "help" me by taking me to a spannish supermarket where he said things were cheaper. I know what I pay at Publix but the prices in the spannish store were much higher. A1lb. package of butter was $1.00 more. Plus I realized that since I've gotten used to shopping while sitting on my couch I just don't want to go nack to all the hassles of parking and unloading and carrying my groceries up stairs to my condo. I learned that giving a small tip greatly imptoves the service but I wonder why many people don't tip at all? I have friends who do Door Dash or Uber Foods and they tell me tips are sort of rare ehich I really don't understand. I've recently boticed avertisibg that yells customers they will give the customer credit on their next order equal to ant tip they give so why not tip? Theae prople are working hard, using their own vehicles, waiting for your order somwtimes, etc then finding your addrerss and carrying your order to your door but then can't expect a small tip? I was considering working part timr like lot's of deniors are doing these days but the lack of tips has me reconsidering. I know me, a customer that stiffed me for a tip would know what I thought about them. I can't stand cheap skatea who want something for nothing! So I'll look for some other kind of part-time job. Someone mentioned dog walking wgich cou;d work for me because I like dogs and they like me! So why not?

#6 | Posted by danni at 2024-08-10 10:17 PM | Reply | Funny: 1 | Newsworthy 1

#2

Publix? Seriously?

Their prices are higher than Kroger, and the Kroger employees are generally happier here, because the Kroger stores here are union and Publix isn't.

I tried Publix a few times when they showed up in town. Nope, was not fun.

That said, if Kroger pulls this price stunt here I'll switch to Save A Lot, I'm not encouraging that behavior.

#7 | Posted by DarkVader at 2024-08-11 02:35 PM | Reply

#7 | Posted by DarkVader

Publix's prices are competitive in my market.

Kroger may be unionized, but they don't pay enough to attract potential employees. I mean, ONE checkout line with a cashier on Friday night?! I asked the manager, "why don't you have more checkout lines open? I'm paying to do my own work in self-checkout."

He said, "we can't get enough employees."

"Well, if you paid enough for a person to work full time and pay all their bills you wouldn't have that problem."

#8 | Posted by AMERICANUNITY at 2024-08-11 02:50 PM | Reply

I worked at Kroger for 1 day back in the 90's. When I started they would only hire me as a bagger because my previous grocery experience wasn't at a union store so "didn't count" I had been dairy and produce at Harris Teeter. They also told me that getting promoted from bagger was based on seniority well on that first day I talked with the other ------- and found out that meant I would be a bagger for about 7 years before getting my first chance at promotion. This at a union negotiated wage of 10 cents more than minimum when I had been making 2.75 more than minimum at Harris Teeter.

Since I've gotten older and more experienced since then I have learned that either a) the union head either took an instant dislike to me for some reason or b) was just generaly an -----, but it put me off unions for years.

Either way if that's how they treat new hires it's no wonder they can't get good people to stick around.

I generally go to Food Lion, or Aldi around here and about every other week a trip to Wegmans. Aldi is the best prices but limited selection, Food Lion is second best pricing with better selection and Wegmans has some good and some bad pricing but awesome selection and some of the best store brand merchandise in the business. Publix did not impress me with their prices or service the couple of times I tried them so I don't bother since they are also the least convenient to me. I still do Harris Teeter/Kroger for my pharmacy and might get a few things to save another trip but that is a once a month thing and the pharmacist is the main reason I still go there. I had issues with both CVS and Walgreens being major pains due to my opioid prescription.

#9 | Posted by TaoWarrior at 2024-08-11 03:12 PM | Reply

#7 | Posted by DarkVader

Our local Kroger never has more than one of the 12 checkout lines with cashiers open.

As I said, Publix's prices are competetive, and a much nicer experience.

We also shop at ALDI.

#10 | Posted by AMERICANUNITY at 2024-08-11 04:03 PM | Reply

"As Warren said on social media on Friday, digital price tags allow stores to "use surge pricing for water or ice cream when it's hot out," or raise the price of turkeys just before Thanksgiving."

I don't think those are the best examples of surge pricing.

I would think better examples would be finding out specific items are sold in greater quantity at very unique times of the day or a specific day of the week and bumping prices during those intervals.

Say ... lettuce on Friday between noon and 3 PM. And buyers don't know this.

Customers know turkeys change price prior to thanksgiving. That's just seasonal changes people expect.

#11 | Posted by eberly at 2024-08-11 04:23 PM | Reply

Related...

We're Entering an AI Price-Fixing Dystopia
www.theatlantic.com

... Algorithmic collusion appears to be spreading to more and more industries. And existing laws may not be equipped to stop it.

If you rent your home, there's a good chance your landlord uses RealPage to set your monthly payment. The company describes itself as merely helping landlords set the most profitable price. But a series of lawsuits says it's something else: an AI-enabled price-fixing conspiracy.

The classic image of price-fixing involves the executives of rival companies gathering behind closed doors and secretly agreeing to charge the same inflated price for whatever they're selling. This type of collusion is one of the gravest sins you can commit against a free-market economy; the late Justice Antonin Scalia once called price-fixing the "supreme evil" of antitrust law. Agreeing to fix prices is punishable with up to 10 years in prison and a $100 million fine.

Enjoy a year of unlimited access to The Atlantic"including every story on our site and app, subscriber newsletters, and more.
Become a Subscriber

But, as the RealPage example suggests, technology may offer a workaround. Instead of getting together with your rivals and agreeing not to compete on price, you can all independently rely on a third party to set your prices for you. Property owners feed RealPage's "property management software" their data, including unit prices and vacancy rates, and the algorithm"which also knows what competitors are charging"spits out a rent recommendation. If enough landlords use it, the result could look the same as a traditional price-fixing cartel: lockstep price increases instead of price competition, no secret handshake or clandestine meeting needed. ...


#12 | Posted by LampLighter at 2024-08-11 04:23 PM | Reply | Newsworthy 1

Our local Aldi got a serious facelift and an enlarged building. The aisles are wider, and many new products for wider choices. They encourage self checkout, but a cashier is readily available.

#13 | Posted by john47 at 2024-08-11 07:31 PM | Reply

I refuse to use any self checkout in any store. When they point me towards them I just say, "I do not work here so I will not use that stuff and I am doing it so you have a job in the near future.".

#14 | Posted by Wildman62 at 2024-08-11 11:13 PM | Reply | Newsworthy 1

Dang it I liked Kroger's.

#15 | Posted by Tor at 2024-08-11 11:21 PM | Reply

__________
Kroger's Pricing Scheme 'Corporate Greed Is Out of Control'

That's just Elizabeth Warren being herself with her faux "consumer protection" persona - forever "outraged" in search of "corporate greed" or "collusions" or still "fighting shrinkflation."

Kroger's "dynamic pricing" is not a "surge pricing" and her example of water and ice cream is beyond ridiculous - it's extremely unlikely for store to change prices during the day's open hours, to avoid buyer's "surprise" at the counter, and it's not even close to AI - it's simple automation of what most large chains already do manually - like reducing prices on items that are about to expire, or on shelf longer than turnover requires, to reduce "shrinkage" from spoiled or unsold products - no need to restamp the prices or change stickers. It It's already done by some chains in UK and several EU countries. There are several of these "digital shelf" companies, to manage products in stock and on the shelves - same as they've done before but actual price changes would be electronic / digital, instead of manual - "cheaper, better, faster" as technology tends to do.

Eberly's example @#11 is much closer to what "surge pricing" might look like, but that still is not what "dynamic pricing" in supermarkets / grocery stores is - just automation and "efficiencies" using advantages of digital / connected tech, using the same basic algos they use today and 20 years ago, to change prices manually. Most already use 'loyalty' cards and apps to get "personal data" on your purchases, and to offer "personalized" discounts or alert you to "sales" on items they need / want to sell fast, so they can restock - goods turnover is everything in grocery business - that's how the sales (and therefore profits) are maximized, not through increasing prices/margins on some individual items at certain times and risk losing both sales and customers to competition.

"Sales" and "digital coupons/discounts" are examples of "dynamic pricing" - they are used to promote sales, not increase prices on-the-fly, or in response to demand aka "surge pricing."

WBTW, Kroger's average gross margin of 20% is lowest in grocery chains industry, with net profit of only 1.4% - Albertson's is 26% / 1.4%, Sprouts 35% / 4.5%, and "discounters" WGrocery Outlet 30% / 1.3%, Value Supermarket 27% / 2.2%, Walmart 27% / 2.2%, Publix 28% / 9.8% Dollar General 27% / 3.9%, Dollar Tree 30% / 3.1%, Costco 12% / 2.8%...

IOW, Kroger and Costco are extremely operationally efficient. Publix is extremely tax-efficient.

FTA: "The senators have previously introduced legislation to prevent shrinkflation, urged the Biden administration to use its executive authority to lower food prices" - exactly how would that be implemented? And isn't that why Biden team, thankfully, dropped "Bidenomics" and "fighting shrinkflation" like a hot potato in the first place?

Just more of the same hand-waving aimed at outraged economic illiterates by 'caring' politicians - "We fight for you against 'greedy' corporations!" - while they promote and enact policies that actually raise costs - and prices - on consumers.
__________

#16 | Posted by CutiePie at 2024-08-13 03:04 PM | Reply

__________

#12 | Posted by LampLighter at 2024-08-11 04:23 PM
Related...
"We're Entering an AI Price-Fixing Dystopia" ... "Algorithmic collusion"

No, it's not at all related to "dynamic pricing" (except slapping "AI" on them) - simply because it's totally different markets and price sensitivity, time lag of price changes and price elasticity - "price dynamics" - are entirely different.

And it's not "algorithmic collusion" - though FTC and politicians like Warren are trying to brand it that way - it's "algorithmic pricing" which is nothing new, has been used in commerce and retail since computers became widely available.

And it's only a case of "corporate greed" hand-waving when the prices go up "in unison" (which was the case everywhere during inflationary post-COVID period) - same as the case with gas prices, when politicians scream "collusion!" and announce all kinds of "investigations" and actions to "curb the greed" - but which makes them silent when prices go down "in unison."

RealPage, and their numerous competitors, simply provide the automated service (and related services, like tenant screening, billing, etc.) for something any landlord can already do by using Zillow or Redfin, Apartment's.com, Homes.com, etc. and using average $/sqft and average rent prices in given area and basic spreadsheet.

It can also backfire big time when the market changes directions, or people want to undercut competitors, e.g., to sell / rent faster or some other "human factor" - IOW, free market in action.

As was the case with Zillow failed experiment when they relied on their own tech:

slate.com - Zillow Torched $381 Million Overpaying for Houses. Spectacular.

fortune.com - Zillow's $6 billion home flipping business was a disaster. Now, a cooling housing market could foil its comeback plan

Comprehensive study of the Algorithmic Pricing by Stanford on algorithmic pricing, and actual problems with "AI" in it:
law.stanford.edu - Overcoming the Current Knowledge Gap of Algorithmic "Collusion" and the Role of Computational Antitrust - {PDF, 32pgs] - February 2024
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#17 | Posted by CutiePie at 2024-08-13 03:32 PM | Reply

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