Walmart expands digital shelf labels nationwide

Digital shelf labels (DSL) are coming to a Walmart near you, as a debate rages over whether the technology will allow retailers and grocers to drive up prices.

The retail giant is expanding the tech to its entire US footprint this year, building on the 2,300 locations that already use the promising, yet controversial technology.

DSLs will allow the company to manage prices through a centralized system, which it says is improving the accuracy of pricing and making sure what’s on shelves is aligned with what customers are paying at checkout. In the past, adjusting prices could take days. Now it takes hours, which frees up time for associates to better serve customers, according to Walmart.

In the blink of an eye: But for some, DSLs are associated with a broader set of controversial practices, such as dynamic and surveillance pricing, leading state lawmakers to pursue bans, and at least one major union to launch a national campaign against the technology.

The United Food and Commercial Workers International Union (UFCW) crafted model legislation, which has been introduced in several states, requiring the use of analog or paper shelf pricing in stores larger than 10,000 square feet.

• The union describes electronic shelf labels (ESLs) as the “missing piece of the surveillance pricing,” which allows companies to “change prices in the blink of an eye.” When combined with AI tools and data collection, it added, “customers don’t stand a chance at the grocery stores.”

Just a tool: Pushing back against that narrative is Walmart, which told Retail Brew that DSLs would not be used for dynamic pricing. The National Retail Federation chimed in last week with a blog post emphasizing that “labels are a communication tool, not a decision-making system,” and arguing that electronic shelf labels don’t enable surge pricing or constant changes, don’t track customers, and don’t collect personal data.

• The trade group pointed to a recent working paper from UC San Diego that found no evidence of ESLs causing price spikes, even when inflation was elevated.

“Unlike Uber or hotels, grocery stores don’t make money on a single item—they make money on your entire basket and your long-term loyalty,” researcher Ioannis Stamatopoulos told UC San Diego Today. “Using surge pricing could alienate shoppers and drive them away permanently, which is the last thing grocers want.”