Legislation has been introduced in the Senate to prohibit so-called surveillance and surge pricing in large grocery stores, aiming to address growing concerns over fairness and affordability for shoppers. The “Stop Price Gouging in Grocery Stores Act of 2026,” put forth by Senator Ben Ray Luján of New Mexico and Senator Jeff Merkley of Oregon, mirrors a similar bill proposed in the House of Representatives in 2025.

The proposed Senate bill mandates that stores disclose any use of facial recognition technology and would specifically ban electronic shelf labels (ESLs) in larger grocery establishments. ESLs have become a point of contention due to their capacity to enable remote price adjustments, opening the door for algorithms to fluctuate costs based on real-time conditions within a store or even an individual’s purchasing patterns.

The primary concern revolves around the potential for stores to implement dynamic pricing strategies, altering costs at different times of the day or personalizing prices based on a shopper’s identity, potentially identified through facial recognition technology. Critics fear this could lead to discriminatory pricing, where factors such as perceived race, gender, or income level might influence the price a customer is charged. A 2025 study highlighted these anxieties, revealing that one prominent delivery service was charging varying prices for identical products, with some customers paying as much as 23% more. Following negative publicity, the company reportedly discontinued its AI-powered pricing model.

Senator Luján emphasized the financial strain many households are experiencing, stating, “Across the country, Americans are struggling to put food on the table.” He added that Congress must ensure technology improves lives, rather than increasing grocery bills, and that individuals should be able to shop without fear of predatory pricing.

The United Food and Commercial Workers International Union (UFCW) reports that at least six states have seen similar legislation introduced to curb surge and surveillance pricing. The union has also launched a public awareness campaign, including a 30-second advertisement, to highlight the perceived threat. While the exact prevalence of in-store surveillance pricing remains unclear, legislators are moving to preemptively regulate the practice before it becomes widespread.

Washington State Representative Mary Fosse articulated the legislation’s core principle: “If two people are in the same store buying the same item, they should pay the same price.” She further noted that large retailers are investing heavily in AI, algorithms, and data systems capable of instant, individualized, and secretive price changes, underscoring the urgency to act before these practices become standard.

The regulatory landscape has seen previous attention to this issue. A prior administration initiated an investigation into surveillance pricing in 2024, with the head of a federal trade commission launching a study into its potential harm to consumers. However, that study was reportedly halted by a subsequent administration in 2025. Consumer sentiment against surge pricing for food is demonstrably strong, as illustrated by widespread backlash in 2024 when a major restaurant chain merely discussed the possibility of implementing dynamic pricing, leading to a swift denial despite earlier statements.

The introduction of this legislation signals a growing legislative and public pushback against advanced pricing technologies in the retail sector, with significant implications for both everyday consumers and the investment community. For households already grappling with an affordability crisis, the prospect of unpredictable or personalized grocery bills adds another layer of financial stress. Consumers are highly price-sensitive when it comes to essential goods, and the erosion of trust in transparent pricing could fundamentally alter shopping habits and brand loyalty. The UFCW International President Milton Jones noted that union members “see the pain in their faces every time they enter the grocery store” and are committed to stopping corporations from changing prices based on factors like postcode or family status.

For investors, the debate around surveillance and surge pricing presents a complex picture. Grocery retailers have been exploring these technologies as a means to optimize revenue, manage inventory, and respond dynamically to market conditions, potentially boosting profit margins and, by extension, shareholder value. The rapid integration of AI and advanced algorithms in retail, while promising efficiency, also presents a paradox where technological advancement could lead to consumer apprehension, mirroring broader discussions around The AI Paradox: Cooling Inflation Fails to Offset Disruption Fears in Volatile Tech Session. A legislative ban or widespread public rejection of these practices could limit a key avenue for growth and efficiency for large grocery chains, potentially impacting their future earnings forecasts and stock valuations. Companies that have heavily invested in such systems might face write-downs or strategic pivots. Conversely, businesses that prioritize transparent and consistent pricing could gain a competitive edge, appealing to a consumer base increasingly wary of algorithmic exploitation. The ongoing legislative efforts introduce an element of regulatory uncertainty into the retail investment landscape, requiring careful monitoring by those with stakes in the sector.