States move to ban dynamic pricing as retailers expand the practice

Maryland has banned dynamic pricing at grocery stores as more retailers explore flexible pricing technology that adjusts costs based on demand, time and location, ABC7 Los Angeles reported Wednesday.

The legislation marks one of the first state-level attempts to regulate algorithmic retail pricing, as companies like Walmart announce plans to install digital shelf labels capable of automatic price changes — a development that could affect millions of grocery shoppers, including those in Orange County.

Dynamic pricing — the practice of adjusting prices based on supply, demand, time of day or location — has long been standard in airline tickets and ride-sharing apps. Now retailers are bringing the practice to grocery store aisles, ABC7 Los Angeles reported.

"Dynamic pricing is basically changing prices based on market conditions over time. So, that means the supplier that you're looking at might look at the supply of what they have to offer and what the demand is," said Emily Prinsloo, Ph.D., an assistant professor of marketing at Rice University.

Walmart has announced plans to install digital shelf labels in some of its stores, a technology that could allow real-time price updates without employees manually changing price tags, according to ABC7 Los Angeles.

Maryland passed legislation banning dynamic pricing at grocery stores and related services, making it among the first states to restrict the practice by law. Other states are considering similar measures, ABC7 Los Angeles reported.

Prinsloo offered practical advice for consumers looking to manage fluctuating costs: "If you are booking online, try to book early to get the less popular times for booking. You can also try shopping midweek. So, Tuesdays and Wednesdays are better than shopping on the weekend, which is more popular. You can also use price trackers," she said.

As digital shelf labels and demand-sensing software become more widespread, consumer advocates and state legislators are pressing for greater transparency in how retail prices are set — a debate that shows no sign of slowing.