Canadian shoppers are no strangers to rising food costs, but a new technological shift could fundamentally alter how they pay for groceries. According to food policy expert Dr. Sylvain Charlebois, dynamic pricing powered by artificial intelligence is poised to move from online platforms directly into physical supermarket aisles, raising profound ethical questions about fairness and transparency.
The End of Predictable Food Pricing
For years, consumers have navigated shrinkflation, skimpflation, and complex loyalty programs. However, the social contract around food pricing—grounded in predictability for a necessity—is now under direct threat. Unlike discretionary purchases like airline tickets, groceries are essential, making the application of algorithmic, variable pricing particularly contentious.
The catalyst for this change is the rapid adoption of digital shelf labels. This technology allows prices to change in real-time within a store, potentially varying by location, time of day, or even individual consumer profiles. The clear line between online and in-store pricing is disappearing, bringing the opaque logic of algorithmic price-setting directly to the grocery cart.
Evidence of Price Discrimination Emerges
Research from the United States provides a startling preview of what could come to Canada. A recent investigation by Consumer Reports, the Groundwork Collaborative, and More Perfect Union conducted an experiment with 437 shoppers across four cities. Participants were asked to purchase identical grocery baskets online at the same time.
The results were revealing: nearly three-quarters of items appeared at multiple prices, with some products showing up to five different price points. On average, price differences reached 13% per item and about 7% across entire baskets.
In one concrete example from a Seattle grocery store, identical baskets ranged from roughly $114 to $124—a spread of more than nine dollars on a single order. Researchers extrapolated that such variability could cost a family an additional $1,200 annually, a significant sum for households already struggling with food affordability.
A Breach of Trust and Fairness
Dr. Charlebois argues that charging different consumers different prices for the same essential item, at the same time and place, simply because an algorithm dictates it, crosses a clear ethical line. When pricing becomes individualized or appears arbitrary, consumer trust erodes rapidly. The checkout ceases to be a level playing field; shoppers are unknowingly being compared and categorized against each other.
While retailers may frame these practices as limited tests to "optimize" pricing, consumers have not consented to be part of experiments involving essential goods. Algorithms trained on personal data—purchase history, location, loyalty activity—can make pricing decisions that feel random but are designed for profit maximization.
This development arrives as Canada grapples with a severe food affordability crisis and declining public trust in grocery pricing. Governments are already debating codes of conduct and transparency measures. Introducing opaque, AI-driven price variability into physical stores would likely worsen this distrust.
The Path Forward: Technology with Transparency
This critique is not a blanket rejection of technology. AI holds genuine promise for reducing food waste, improving supply chain efficiency, and enhancing forecasting. However, its application must align with core societal values, especially concerning necessities.
Dr. Charlebois asserts a fundamental principle: if two people buy the same food from the same store at the same time, they should pay the same price. If pricing experiments are to be conducted, consumers must be informed and given the choice to participate. Should the industry fail to guarantee this basic fairness for essential goods, the article concludes that regulatory intervention may become necessary to protect Canadian consumers from a new, digitally-enabled form of price discrimination.
Dr. Sylvain Charlebois is the director of the Agri-Food Analytics Lab at Dalhousie University, co-host of The Food Professor Podcast, and a visiting scholar at McGill University.
