Two Democratic senators have launched an investigation into Kroger’s introduction of digital price tags, a feature that allows retailers to dynamically change their prices “with just the click of a mouse.”

In a letter to Kroger, Senators Elizabeth Warren and Bob Casey accuse major grocery chains like Kroger and Walmart of seeking to “extract consumers to increase their profits.”

“Analysts have pointed out that widespread use of dynamic pricing will result in food and other consumer goods being ‘priced like airline tickets,'” the letter says, “and that this will create a sense of urgency and scarcity that would not exist if there were simply publicly posted prices that everyone understood.”

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Kroger, the largest grocer in the U.S., has been testing “electronic shelf labels” since 2018. The feature expanded to 500 stores last year, according to Warren and Casey. Walmart later announced it would introduce digital price tags in 2,300 stores.

Kroger, which could add thousands of stores to its portfolio with the purchase of Albertsons/Safeway, denied the allegations in a statement to FOX TV Stations. Walmart was not immediately available for comment.

“Kroger’s business model is to lower prices over time so more customers shop with us, which leads to more revenue, which we then invest in lower prices, higher wages and an even better shopping experience. Everything we do is designed to support this strategy, and customers shop at Kroger more today than ever before because we fight inflation and offer value for money. Any test of electronic shelf labels is aimed at further lowering prices for customers where it matters most. To say otherwise is not true.”

Senators, however, say this is just another “extortionate model” by the food giants, as many families continue to struggle with rising food prices.

The price of an average basket of groceries was 3.1 percent higher in July than three months ago and 2 percent higher than a year ago. According to the letter, U.S. consumers spent an average of 11.2 percent of their budget on groceries.

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“Major grocery chains like Walmart and Kroger have claimed that dynamic pricing … benefits consumers by giving employees more time to serve customers,” the letter said. “However, these tools also pose the risk that grocery giants will abuse their power and drive up food prices by raising prices suddenly and at times when certain products are in the highest demand.”

“For example, stores could use this technology to raise the price of turkeys in the days leading up to Thanksgiving or ice cream on hot days. This way, customers are faced with unexpected price increases at the supermarket shelf and cannot afford the food they had originally planned to buy.”

Digital price tags raise privacy concerns

In addition to dynamic pricing, the electronic shelf labels also raised concerns about data protection, according to the senators.

They say Kroger has a partnership with Microsoft that will involve attaching cameras to stores’ digital displays “that will use facial recognition tools to determine the gender and age of customers captured on camera and present them with personalized offers and advertising.”

The technology, the letter says, will allow Kroger to use customer data to create personalized profiles of each customer and then use those profiles “to determine how much of a price increase each of us can tolerate.”

“It is outrageous that grocery giants like Kroger continue to implement price spikes and other profiteering schemes while families continue to struggle to afford food,” the letter said.