Dynamic pricing is coming to grocery stores

When we think dynamic pricing, we usually think of airlines, Uber or Amazon quickly changing their prices. But now, dynamic pricing is coming to a supermarket near you.

SCOTT DETROW, HOST:

More and more, the things we buy are being priced by algorithms. From an airline ticket to an Uber ride, prices change. And your milk might be next. Amanda Aronczyk of NPR’s Planet Money takes us to a store with dynamic pricing.

AMANDA ARONCZYK, BYLINE: Partap Sandhu is the head of pricing at a major Norwegian supermarket called REMA 1000. With a tap, he can change the price of any one of thousands of grocery items. REMA has been using dynamic pricing for more than a decade. At the moment, Partap is walking quickly towards the canned food aisle.

PARTAP SANDHU: So we’ll go find the mushrooms now.

ARONCZYK: He stops in front of the whole canned mushrooms in liquid.

SANDHU: Any minute now, it will change price.

ARONCZYK: Partap has just learned that the competition is selling these for 20 cents less than at his supermarket. So Partap is matching. No one will have to peel off a sticky price tag or remove a paper label. Instead, the new price will flash on an electronic shelf label.

SANDHU: So any second now.

ARONCZYK: This label looks a lot like a paper shelf label – same size, lettering, same location on the shelf, but it’s actually a screen that can be updated wirelessly. This is what allows brick-and-mortar stores to be more like online retailers.

SANDHU: In certain times of year, we can have up to 2,000 price changes a day.

ARONCZYK: Like take, for example, during Easter time.

SANDHU: This is a big thing in Norway. You have to go skiing.

ARONCZYK: You have to go skiing?

SANDHU: Yeah. And if you don’t do it, I mean, you’re not from the region.

ARONCZYK: (Laughter) OK.

SANDHU: So – and you have to have Kvikk Lunsj.

ARONCZYK: Kvikk Lunsj – Partap says it’s basically like KitKat, but better.

SANDHU: Our strategy would be to sell it 10 cents…