When Your Grocery Data Sets the Price

Five Fronts, One Target

Something unusual is happening in American consumer protection: federal legislators, state governments, labor unions, and state attorneys general are all going after the same practice at the same time. That practice is surveillance pricing: the use of your personal data to calculate the maximum you'll pay for a gallon of milk.

In the first two weeks of May alone:

• Rep. Frank Pallone launched a congressional inquiry into food retailers' pricing practices on May 13.^[1]
• Colorado's HB 1210 passed the Senate on May 6 and the House on May 7, then Governor Jared Polis vetoed it on June 2.^[2]
• New York's One Fair Price Package targeted individualized pricing and electronic shelf labels.^[3]
• The UFCW continued its national campaign to ban electronic shelf labels in large grocery stores.^[4]

This isn't a coincidence. It's a backlash. And it started with a single Consumer Reports investigation in December 2025 that caught Instacart bragging to potential retail clients about how "incredibly lucrative" algorithmic pricing experiments were: experiments that produced price differences of up to 23% for identical products shown to different shoppers.

Pallone's 25 Letters

On May 11, Energy and Commerce Committee Ranking Member Frank Pallone (D-NJ) sent letters to 25 major food retailers (including Walmart, Amazon, Target, Whole Foods, Albertsons, CVS, Walgreens, Stop & Shop, and Wegmans) demanding answers about their pricing practices.

The questions are pointed:

• What customer data "elements" do you use to set prices?
• Do you use AI or machine learning algorithms to determine pricing?
• Do you buy data from third parties for pricing decisions?
• Can customers opt out of having their data used to set prices?

"Consumers deserve to know if businesses are using their personal information to manipulate the prices they pay or experiment with algorithms to set the prices they see," Pallone wrote.

The responses are due May 26. What makes this investigation different from past hand-wringing is timing: it lands while state legislatures are actively passing bans, giving Congress political cover to escalate if the answers are bad.

Colorado: Passed, Then Vetoed

Colorado's HB 1210 would have prohibited individualized price and wage setting based on surveillance data. The Senate passed it 19-15-1 on May 6, 2026, and the House passed it again on May 7. Governor Jared Polis vetoed the bill on June 2.^[2]

The bill covered price or wage-setting algorithms that use personal data to produce individualized outcomes. It included exceptions for cost differences, publicly disclosed eligibility criteria, loyalty and membership programs, needs-based discounts, pre-existing subscriptions, and credit decisions.^[2]

Consumer Reports and other consumer groups had urged the governor to sign the bill before the veto.

Maryland Signed. New York Exposed.

Maryland didn't wait for Colorado. On April 28, Governor Wes Moore signed the Protection from Predatory Pricing Act, which takes effect October 1, 2026. The law prohibits food retailers from using "surveillance data" for individualized pricing and requires fixed prices for a minimum of one business day.

New York took a different approach. Instead of banning surveillance pricing, the state's Algorithmic Pricing Disclosure Act (in effect since November 2025) forces companies to tell you when it's happening. Any business that sets a price using an algorithm and your personal data must display: "THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA."

The result was revealing. Target started showing the disclosure to New York shoppers. Suddenly, what had been an invisible practice became a visible one. It turns out people don't love knowing that the price on their screen was calculated based on their browsing history.

In March 2026, New York Attorney General Letitia James rallied support for the "One Fair Price Package," a pair of bills to go beyond disclosure and actually restrict the practice. In January, her office sent a formal information demand to Instacart over its pricing practices.

1.2 Million Grocery Workers Join the Fight

The United Food and Commercial Workers union (1.2 million members across the US and Canada) launched its "Affordable Groceries and Good Jobs Campaign" in February 2026. The union is pushing for bans on surveillance pricing and electronic shelf labels (ESLs) in large grocery stores.^[4]

Electronic shelf labels are the hardware that makes surveillance pricing possible in physical stores. These digital price tags can change prices in real-time, so one shopper could buy a gallon of milk at one price while another shopper pays more for the same gallon later the same day. Walmart announced plans to roll out ESLs to all US locations within one year.

The UFCW has gotten traction. State legislators in New York, Oklahoma, Washington, Arizona, Nebraska, Maryland, Tennessee, Minnesota, Georgia, and Iowa have all introduced surveillance pricing or ESL legislation connected to the campaign. Federal companion legislation, the Stop Price Gouging in Grocery Stores Act, introduced by Senators Ben Ray Luján (D-NM) and Jeff Merkley (D-OR), would ban dynamic pricing at grocery stores, require facial recognition disclosure, and ban ESLs in large stores nationwide.

The union's argument is straightforward: these systems don't just gouge consumers, they eliminate jobs. A digital price tag doesn't need someone to swap it out. Every ESL is a task that used to belong to a grocery worker.

How They Price You

The FTC published a report in January 2025 documenting exactly how surveillance pricing works. Companies charge more based on:

Seventy-four percent of grocery items were offered to consumers at multiple different prices in recent studies. That's not dynamic pricing based on supply and demand. That's a system designed to extract the maximum from each individual based on their data profile.^[3]

What You Can Do

The Bottom Line

For years, surveillance pricing operated in the dark. Retailers quietly tested how much they could charge each individual, and most shoppers never knew the person next to them was paying a different price for the same product.

New York's disclosure law ripped the curtain back. Colorado and Maryland are banning the practice outright. Congress is demanding answers. And 1.2 million grocery workers are making it a labor issue, not just a consumer one.

The grocery industry spent decades building loyalty programs to collect your data. Now they're using that data against you. The question isn't whether surveillance pricing is real. Target's own disclosures proved that. The question is whether the crackdown moves fast enough to matter, or whether Walmart finishes rolling out digital price tags to every store in America first.

Sources

1. Rep. Frank Pallone: Pallone Launches Surveillance Pricing Inquiry (May 13, 2026; press release URL could not be fetched in this pass)
2. Colorado General Assembly: HB26-1210 Prohibit Surveillance Price & Wage Setting
3. New York Attorney General: Calls for Passage of Legislation to Protect from Predatory Pricing (March 16, 2026)
4. UFCW: Ban Surveillance Pricing on Groceries (February 2026)

Related Coverage

• Pallone Sends Letters to 25 Retailers Over Surveillance Pricing
• Colorado Passes First-in-Nation Surveillance Pricing Ban
• Maryland Moves to Ban Surveillance Pricing in Grocery Stores
• California Launches Surveillance Pricing Investigation