Grocery groups warn FTC against overreaching on pricing rules

The Food Industry Association (FMI) and the National Grocers Association (NGA) have filed comments urging the Federal Trade Commission to refine its proposed enforcement policy on personalized pricing. They warn that overly broad regulations could disrupt established industry practices, particularly those tied to consumer promotions and price accuracy systems.

In their submissions, the groups distinguish between personalized promotions—such as coupons or loyalty discounts—and dynamic pricing models that adjust prices upward based on individual consumer data. They argue that promotions benefit all shoppers by lowering prices, whereas dynamic pricing exploits personal data to maximize revenue. FMI specifically highlighted concerns about loyalty programs, waste-reduction markdowns, and price-accuracy technology being misclassified as violations under the FTC’s proposed rules.

Stephanie Johnson, NGA’s senior vice president of government affairs, explained the difference in clear terms: “When a grocer sends a customer a coupon for the cereal she buys every week, her price goes down, and a shopper without the coupon still pays the shelf price. Personalized pricing works in the opposite direction: it uses personal data to push a price up, toward the most a particular shopper will pay. Grocers have offered the former for generations, and families count on it. Policy on personalized pricing should be aimed only at the latter.” She emphasized that traditional promotions have been a cornerstone of grocery shopping for decades, relied upon by families to manage budgets.

The FTC’s proposed policy defines personalized pricing as using consumer data to set prices according to factors like a shopper’s likelihood to compare prices or their estimated spending limits. Although the agency cannot outright ban the practice, it could still cite businesses for violations of the FTC Act if they use undisclosed personal data in pricing decisions.

FTC Chairman Andrew Ferguson addressed this risk in an August statement, stating: “When consumers see a listed price, they expect it to be [the] same price that everyone else sees, not the retailer’s estimate of how much they are willing to pay based on their personal data,” The agency’s push follows pressure from consumer advocates and lawmakers who accuse retailers of using technologies like electronic shelf labels (ESLs) to manipulate prices.

Both trade groups rejected claims that ESLs enable predatory pricing. Johnson dismissed the criticism, stating: “An electronic shelf label is simply a price tag.” She argued the technology streamlines price updates, reducing labor costs that would otherwise be required for manual adjustments. The FTC’s proposed enforcement, however, treats ESLs as a potential pricing tool rather than a neutral display method.

Grocers argue they lack control over final consumer prices, which are often set by suppliers or third-party systems. NGA called on the FTC to clarify compliance standards and shift accountability to the entities that actually determine pricing. Without clearer guidelines, retailers risk facing penalties for practices, such as loyalty discounts, that consumers already accept.