New study finds little evidence of surge pricing when retailers use digital shelf labels

Recap: In recent years, digital shelf labels have stirred debate across the United States. Although some shoppers and lawmakers worry the technology could enable unpredictable, demand-driven price hikes, a new academic study suggests those fears may be overblown.

Research recently published by teams from the University of Texas at Austin, the University of California, San Diego, and Northwestern University analyzed five years of pricing data from a major grocery chain that adopted digital shelf labels in 2022. The study found no evidence that the store engaged in surge pricing after installing the digital labels. Temporary price hikes remained rare, affecting just 0.005 percent of products per day before the switch and increasing by only 0.0006 percentage points afterward. Researchers also observed a slight increase in product discounts following the rollout.

Despite the data, skepticism persists. Posts warning that supermarkets could exploit digital labels to instantly raise prices – like ...