The National Grocers Association is urging the Federal Trade Commission to separate surveillance pricing from the everyday discounts that lower grocery bills. The trade group, which represents independent supermarkets, filed comments Sept. 25 on the agency’s Proposed Enforcement Policy Statement Regarding Personalized Pricing.
In the six-page letter, NGA says independent grocers do not use shoppers’ personal data to estimate what they will pay and then charge them more. Instead, the shelf price works as a ceiling. Every discount moves the price down from there.
“Independent grocers do not use personal data to charge shoppers more for the same item. Loyalty programs, coupons and discounts are tools that put money back in the consumers’ pockets,” Stephanie Johnson, NGA’s senior vice president and head of government affairs, said in a news release.
What the FTC Proposed
The FTC announced its draft statement Aug. 19 after a 2-0 vote. The agency describes personalized pricing as using personal data to set prices based on what a company believes an individual will spend.
At the time, FTC Chairman Andrew Ferguson said the commission lacks legal authority to ban the practice in all circumstances. However, he warned that businesses that fail to tell consumers how personal data shapes a price may violate the FTC Act. The agency later extended its comment deadline by one week, to Sept. 25.
Meanwhile, states have moved faster on surveillance pricing. Maryland and Connecticut enacted restrictions earlier this year. Then, in July, New Jersey Gov. Mikie Sherrill signed the Fair Price Protection Act. The measure bans the practice for groceries and includes a one-year moratorium on new electronic shelf label installations, as Abasto Media previously reported.
Why Surveillance Pricing Rules Worry Independent Grocers
NGA’s case against a broad surveillance pricing definition turns on direction. A coupon for the cereal a customer buys every week lowers her price, the letter explains. A shopper without that coupon still pays the shelf price. Personalized pricing, by contrast, uses personal data to push a price up toward the most a particular shopper will pay.
Consequently, the association warns that an imprecise definition could sweep in loyalty programs, targeted offers, digital coupons, markdowns and electronic shelf labels. The draft’s disclosure expectations draw particular concern. Attaching a data disclosure to every digital coupon would confuse shoppers, NGA contends. Moreover, legal uncertainty could push grocers to scale back programs that save families money.
The stakes run high for small operators. About half of NGA’s members run a single store, and net profit margins range from 1% to 2%, according to the letter.
“At a time when families are focused on the cost of groceries, we want to make sure these efforts don’t unintentionally discourage the very tools that help lower their grocery bills,” Johnson said.
Related Article: Digital Shelf Labels: Walmart CEO Vows No Surveillance Pricing
Electronic Shelf Labels and Markdowns
NGA also defends electronic shelf labels as a consumer-protection technology. The labels show the same price to everyone in the aisle, the group says. Members use them to display prices, not to set them. In addition, digital tags make small markdowns on perishables practical, reducing food waste.
The letter criticizes New Jersey’s moratorium for treating a display technology as a pricing strategy. It also asks the FTC to confirm that nutrition incentive and produce prescription programs fall outside the definition. Those programs often base eligibility on income or health status.
Not everyone agrees. The United Food and Commercial Workers International Union wants an outright ban on surveillance pricing and on the technologies it says enable the practice, including electronic shelf labels. In an Aug. 20 statement, UFCW International Vice President Ademola Oyefeso argued that disclosure alone will not protect shoppers.
Who Sets the Price Online
Finally, NGA wants accountability to follow the party that sets the price. Third-party delivery platforms often control consumer-facing prices and fees for goods that carry a grocer’s name, the association says. Under some arrangements, platforms do not tell grocers what pricing they apply. Therefore, NGA argues, any disclosure obligation should fall on the platform.
NGA’s Five Requests to the FTC
The letter closes with five recommendations:
- List practices that do not count as personalized pricing, including voluntary loyalty programs, coupons, weekly circulars, perishable markdowns and electronic shelf labels.
- Define personalized pricing by direction and purpose.
- Keep disclosure practical by letting published program terms and privacy notices satisfy any expectation.
- Place disclosure obligations on the party that sets the price.
- Target harmful conduct, not the tools that keep food affordable.
What Comes Next
The comment window closed Sept. 25, and the statement remains a proposal. The final language will shape how the agency treats loyalty apps and digital coupon programs. For independents, the NGA filing sends one message: discounts do not belong in the surveillance pricing debate.