European grocery stores have been on the top of their game lately when it comes to setting a good example -- think Germany’s pay-what-you-want supermarket and the U.K.’s food waste-driven supermarket delivery trucks -- but the latest innovation in British supermarkets may be one to think twice about.
According to recent reports, U.K. supermarkets are hoping to move away from fixed pricing to dynamic pricing. This means the prices of items would fluctuate according to demand, and high-demand products, like burger patties during barbecue season or beer on game day (or in the U.K. strawberries during Wimbledon!), could be subject to significant price bumps. The changes would be reflected by an ever-changing electronic price pad as opposed to paper price tags.
The idea of dynamic pricing is something that consumers have had plenty of time to get used to thanks the likes of Uber’s surge pricing, for example, or the fluctuating prices of airline tickets. And believe it or not, surge pricing isn’t exactly a new thing in supermarkets. Via loyalty cards and other programs, some U.S. supermarket chains are reported to have played around with customer-specific pricing based on shopping history. For grocery stores, the motivation to use dynamic pricing is the same as Uber’s motivation to hike car prices when they know the cars are in-demand: it’s a good way to maximize profits.
And while that may not seem as ideal to buyers as it is for businesses, dynamic pricing could come with some payoffs for shoppers. For example, British store Marks & Spencer experimented with using dynamic pricing last year to offer special deals before 11 a.m. in order to entice workers to buy their lunches there before the rush.
As the U.K. is said to be planning to do away with the fixed price tag in the roughly the next five years, our best bet might be to see how it all works out there and get a better idea of how best to implement a similar system like this before giving it a go (learn from their successes or mistakes!). For now, American shoppers can likely stick to their grocery newsletters and clipped coupons for a good deal.