Dynamic pricing in supermarkets: myth and reality

Electronic shelf labels let a store change a price in minutes, but that does not oblige anyone to do it, and it is not the same as dynamic pricing. The grocery coverage we reviewed describes concern about what the technology could enable.

The law, in the UK and the EU alike, asks that the shelf price be the price charged and that any “was/now” comparison be genuine.

Why the debate caught fire in 2026

In April 2026 the Bank of England published an analysis of algorithmic pricing. CX Network’s report of it says the Bank named supermarket shelf labels among technologies that “could enable dynamic pricing in the future”, and that it saw both efficiency gains and fairness concerns. Its verdict on inflation was calm: algorithmic pricing “does not appear to be an inflationary menace”, with the open question of what happens if it spreads beyond discretionary goods such as hotel rooms.

A few days later Tesco said it was about to introduce “personalized pricing” with AI. The same report quotes an analyst at HyperFinity who reads this as personalised offers, not personalised prices, and notes that the statement did not mention shelf labels at all. A HyperFinity survey of 2,000 UK consumers, cited there, found 4 % who “love” dynamic pricing, 65 % who dislike it and 33 % who hate it.

Rollouts feed the unease. According to an opinion piece in Food & Drink Technology (22 April 2026), Morrisons, Co-op, Waitrose and Asda are rolling out shelf labels across stores, while Tesco and Sainsbury’s are described as trialling them. The piece gives no store counts, and it is an opinion column, so treat the list as indicative.

None of this is new. The Grocer ran a comment in June 2017 answering press reports that UK shoppers would lose fixed grocery prices within five years. A Morrisons spokesman, then trialling labels in one Leeds store, was quoted: “We have no intention of introducing dynamic or ‘surge’ pricing.” The same article recalls a BBC investigation, in February 2017, that found out-of-date promotional prices in dozens of Tesco stores, which is the kind of error labels are meant to remove.

Three things people mix up

One phrase is covering three different practices.

Practice	What it is	Who sees the price	Example reported
Efficient repricing	Updating the shelf price without relabelling by hand	Everyone	Fewer hours spent on price changes and out-of-date promotions
Time- or demand-based pricing	The shelf price moves with the hour, stock or demand	Everyone, but it depends on the moment	REMA 1000 (Norway): up to 100 price changes in a day, per Forbes Espana quoting the Wall Street Journal
Personalised pricing	The price depends on the customer’s data	Each customer sees their own	Tesco’s “personalized pricing” announcement, which analysts read as offers

The first is what justifies the investment today. The second exists and does not always push prices up: Forbes Espana describes Albert Heijn using automatic markdowns on perishables, with bigger discounts the greater the risk that an item goes unsold. The third is what shoppers fear most and what lawmakers have started to target.

What the technology allows and what the retailer decides

A shelf label receives a price from the store system and displays it. It answers one question: how long does a change take to reach the shelf? With paper, hours of staff time. With an ESL, minutes. When to change a price, and according to which variable, is settled in the pricing system and the commercial team. The label executes; it does not decide.

That supports two honest readings. On the side of the worry: without labels, repricing 5,000 lines every hour is unworkable, and with them it is not, so it is reasonable to be uneasy about the capability. On the other side, the evidence from stores that already have them is thin on abuse. A working paper by Robert Sanders (UC San Diego), Ioannis Stamatopoulos (UT Austin) and Robert Bray (Northwestern) analysed more than 180 million product-level observations from 114 stores in four US states, as labels were installed between October 2022 and mid-2024. Before labels, about 0.005 % of products showed short-lived unexplained price spikes; the figures reported after installation are of the same tiny order, and the authors found no evidence of surge pricing, even in a period of high inflation. The press summaries of the exact before-and-after figures are not consistent with each other, so we quote the order of magnitude and the authors’ conclusion rather than a precise change. The limits are real: one unnamed retailer’s data, four states, and a working paper not confirmed as peer-reviewed.

There is also a commercial reason for restraint. The Food & Drink Technology column argues that the backlash is above all about trust during a cost-of-living squeeze. That is the author’s reading, not a measured effect, but it points to what a chain risks if shoppers see prices move.

The legal framework

Neither the UK nor the EU has a chapter on shelf labels or on dynamic pricing in stores. General price-marking and consumer rules apply. The regulation overview covers them in more detail.

Showing the price, and charging it. In Great Britain the Price Marking Order 2004 (SI 2004/102) contains the obligations to indicate the selling price (Article 4) and the unit price (Article 5). The CTSI guide for traders (reviewed April 2026) notes that the Order was amended with effect from 6 April 2026; check the current text before relying on any article. Changing a price often breaks nothing. Charging at the till something different from what was shown is where the exposure lies, and it is covered in shelf price versus till price.

Total price. The Digital Markets, Competition and Consumers Act 2024 prohibits misleading pricing, including drip pricing and partitioned pricing. Section 230 treats a price invitation as misleading if it omits the total price including mandatory fees, taxes and charges, and the CMA can now fine up to 10 % of global turnover, according to a CMS briefing of December 2025 on the CMA’s price transparency guidance. This is not specific to shelf labels, but a shelf label is a price invitation.

“Was/now” prices. The UK has no fixed look-back period of the kind used in the EU. The CTSI trader guide sets no number of days, says a reference price must be one the trader genuinely charged, and says the comparison should not last longer than the higher price did. In EU member states the Omnibus Directive (EU) 2019/2161 is stricter: next to a reduced price, the lowest price applied in the previous 30 days must be shown, with an exception for perishable goods marked down because of imminent expiry that varies by country. If you sell in both markets, the 30-day reference price explains the calculation and why price history becomes a legal record.

Personalised prices. The same Omnibus Directive requires distance sellers in the EU to tell the consumer when a price was personalised using automated decision-making. A shelf label shows one price to everybody, so personalisation would reach shoppers through an app or a digital coupon. We found no equivalent obligation in the UK sources reviewed, and data protection law, which would also apply, is outside this page. This is not legal advice.

What the United States has done, and what it hasn’t

Maryland’s Protection From Predatory Pricing Act (HB 895) was signed in April 2026. According to DLA Piper, it applies to grocery stores above a size threshold and to delivery platforms, and it prohibits using personal data to set higher prices for individual customers, while leaving promotions and loyalty offers in place. It targets personalisation, not the hardware: shelf labels remain lawful. It is a state law and does not transfer to the UK or the EU.

How to read a “dynamic pricing” headline

Four questions separate alarm from evidence.

1. Does it name a chain, a product and a date, or does it describe a possibility?
2. Does the price change for everyone, or depend on who is buying?
3. Does it go up, or down (end of day, expiry)?
4. Is there a primary source: the law, the company or a study with a method?

Most 2026 material falls on the possibility side. That can change, so the useful question for a retailer thinking about automated rules is practical: who approves a change, how is it recorded for the reference-price calculation, and how do you guarantee the till matches the shelf? The cost of that control belongs in a business case; the total cost calculator lets you include the manual work labels avoid, and what an ESL is explains the basics.

Limits of this page

A lawyer has not reviewed this page. Rules and retailer plans move quickly; the UK picture rests on trade press from 2017 and 2026, and not on an official register of pricing practices. The site is published by Keonex, which makes and installs electronic shelf labels; how we handle sources is described in the methodology.