Inside the Maryland Dynamic Pricing Ban That’s Making Walmart and Kroger Sweat

If you’re paying attention, the first thing you might notice when you walk into an Annapolis grocery store on any given afternoon is how many price tags are now softly glowing rather than printed on paper. They appear diminutive, almost ornamental. Without giving them a second thought, the majority of customers ignore them and reach for milk, rice, or their preferred brand of pasta sauce. However, those tiny screens can change in a matter of seconds, and Maryland is going to do something that no other state has done because of that silent capability.

Governor Wes Moore says he is eager to sign the Protection from Predatory Pricing Act, which was approved by the General Assembly earlier this month. Large grocery stores in the state will be prohibited from altering prices during the day or charging different customers different prices for the same item based on personal information, starting on October 1. Speaking with people about this law gives the impression that it was introduced later than it should have. The majority of customers stopped challenging dynamic pricing in ridesharing and airlines years ago because it has become so commonplace. But groceries feel different. They are required.

People don’t realize how bizarre the mechanics of what’s being prohibited are. A store gathers data about you, such as your neighborhood, how frequently you browse specific online aisles, what you purchased last month, and whether a rival supermarket is close by. This data is then fed into software that determines how much you would likely be willing to pay. A famous Kroger customer in Oregon received a sixty-two-page profile after requesting her data file in accordance with a state privacy law. The majority of its conclusions were incorrect. It’s worth taking a moment to consider that. Based on estimates, which are frequently erroneous, retailers are pushing prices up or down.

It’s helpful that Moore has discussed this in simple terms. During his testimony before lawmakers, he stated, “Digital price tags are replacing paper ones,” citing apps that have switched from search-based to predictive and cameras that silently monitor aisles. He gave a brief, almost casual example of going into a supermarket with one of his employees and getting the same item, only to be charged different prices because the algorithm had determined that one of them would just pay more. It’s a disconcerting picture, and it probably works. Unfairness at checkout is easier for people to comprehend than antitrust theory.

Supporters are aware that the law is not flawless. Despite their intense lobbying efforts, Consumer Reports acknowledged that the final version of the bill did not meet their demands. Retail industry groups pushed for and were granted permission for loyalty programs and promotional discounts. Consumer Reports’ Justin Brookman brought up an issue that is difficult to ignore: there is insufficient enforcement. A chain can just stop if it gets caught, and that might be the end of it. When you consider the size of the companies involved, the $10,000 starting civil fine seems substantial.

However, Maryland must move first. While New York already has a transparency law in place, California, Colorado, Illinois, and New Jersey are observing and creating their own versions. Lawmakers in other states will have to decide whether to close the loopholes that softened Maryland’s bill, which the retail industry will continue to push for. Even in states that never pass anything themselves, the patchwork that develops over the next two or three years may end up influencing grocery pricing across the country. As you watch this play out, you get the impression that the larger battle is just getting started, somewhere between the gentle glow of a digital tag and a customer who doesn’t understand why her receipt differs from the woman’s behind her.