Dynamic Pricing. A term I first heard about 15 years ago when I wanted to buy baseball tickets to an Orioles-Red Sox game at Camden Yards. Scanning ticket pricing for several other games I noticed that prices significantly varied for the same seats when other lesser teams played in Baltimore. I soon learned that this “marketing” strategy would be widely deployed by other industries (think airline tickets, Uber fares).
However, it wasn’t until recently that dynamic pricing became a term that was associated with the grocery business. The development of digital electronic shelf labels (ESLs) brought concerns from advocacy groups and politicians that retailers now had the ability to effortlessly raise prices during high-demand periods or during adverse weather conditions (I know, it’s a ridiculous notion).
However, it’s not so ridiculous to Instacart which is being accused of charging their online customers different prices even if they ordered product from the same store at the same time.
Instacart has vehemently denied any intentional fraud; instead saying the discrepancies were part of an AI test (using its Eversight tool) with about 10 retail partners to better understand category level price sensitivity so they can substantially invest in lower prices where consumers care most.
I found Instacart’s response in of all places – The New York Post – to be confusing and ambiguous. The San Francisco based delivery company said its price “tests” are never based on the personal or behavioral characteristics of shoppers. It said its prices were never “dynamic,” meaning they never change in real time, although the study found that they changed wildly depending on who was shopping.
The study found no evidence that Instacart was using personal information but said it’s almost certain that Instacart and other retailers have the ability to base prices on demographics like age and household income, as well as whether they’re new or returning customers.
Instacart claimed its “tests” help retailers “learn what matters most to consumers.” While the algorithm might charge higher prices on craft beverages or specialty snacks, it often lowers prices on essentials like milk and bread, Instacart claimed.
“Just as retailers have long tested prices in their physical stores to better understand consumer preferences, a subset of only 10 retail partners – ones that already apply markups – do the same online via Instacart,” an Instacart spokesperson told The Post in a statement.
Down deep, I still don’t believe that Instacart intentionally conspired to rip off consumers, but at the least they should have had better control of their test. And as the developer of the algorithm that produced the results, they deservedly should be in the crosshairs for criticism.
After the flaws of the study were revealed last year by a progressive advocacy group, Groundwork Collective and publication Consumer Reports, Instacart announced that it would no longer allow its retail partners to conduct AI pricing tests.
The dynamic pricing problem certainly won’t enhance Instacart’s reputation. It also doesn’t help that the company, in a separate case, late last year paid $60 million in refunds to consumers to settle allegations that it engaged in numerous unlawful tactics that harmed shoppers and raised the cost of grocery shopping as part of an FTC investigation.
Now the big Federal agency, which has been pretty inert over the last year after tech slayer Lina Khan left, has already begun a new query over the dynamic pricing problem.
The dynamic pricing faux pas has also attracted the attention of Congress and of Litigatin’ Letitia (James), New York State’s Attorney General (who really would indict a ham sandwich).
Instacart, which went public in 2023, needs to do a much better job of being more accessible and transparent. Because without the trust and support of its retail grocery partners, it’s nothing more than a third-party service company whose market share could easily be gashed by newer competitors DoorDash and UberEats.
The Newly Released Food Pyramid: Eat Lotsa Steak (If You Can Afford It)
In the 52 years that I’ve written an editorial column about the grocery business, I’ve generally tried to steer clear of politics and consumer issues unless they have trade ramifications.
I will reveal that I’ve professed little love for the last two presidents but recognize my political views are pretty much disconnected and unimportant to how I earn a living. That said, it’s getting harder to mind my own business when government policies interact with and adversely affect the food industry as they’ve done in the past few years. Whether it’s the arbitrary left-leaning rulings of former FTC Commissioner Lina Khan, the burden that manufacturers, distributors, retailers and consumer face by the unfair tariffs now in place, or the significant reduction in SNAP benefits, this seems like the right time to speak up.
I’ve recently opined about those issues (and received both criticism and praise from our readers), but there’s something new whose long-term impact could be greater than any of those other rulings and policies. I’m talking about the USDA’s newly released “Dietary Guidelines for Americans, 2025-2030” – the brainchild of Robert F. Kennedy Jr., the current secretary of health and human services, who other than being a Hall of Fame “lucky sperm club” member, spent much of his life dealing with environmental and (so-called) public health issues (without a medical or public health degree).
There are many things that new guidelines (and related food pyramid) got right – eat vegetables and fruits throughout the day, focusing on whole forms; incorporate healthy fats from whole foods such as meats, seafood, eggs, nuts, seeds, olives, and avocados; focus on whole grains, while sharply reducing refined carbohydrates; limit highly processed foods, added sugars, and artificial additives; eat the right amount for you, based on age, sex, size, and activity level; choose water and unsweetened beverages to support hydration; and limit alcohol consumption for better overall health.
Now for the confusing and potentially damaging message: prioritize protein at every meal; and consume full-fat dairy with no added sugar. That sounds logical on one level and counter-intuitive (and dangerous) on another. At the top of newly redesigned food pyramid there are illustrations of beef, cheese and turkey with whole grains at the bottom.
As a septuagenarian who’s battled weight issues for much of his adult life, I’d say Kennedy is correct in addressing and attempting to correct America’s obesity problem. Only he’s doing it in a misleading manner. I can personally (and medically) attest that emphasizing beef and full-fat dairy products is not the soundest advice that could be disseminated by the government’s primary health agency.
Beyond pure health, the cost of beef today is exorbitant, in part due to climate issues as well as the dominance of America’s largest beef companies – Cargill, JBS, National Beef and Tyson Foods – which collectively control more than 80 percent of the national market.
We also know that harvesting both beef and poultry severely taxes the environment. While I’ve never come close to hugging a tree in my life, the statistics quoted by author Mattthew Prescott in a New York Times editorial are eye-opening: beef converts only 1 percent of feed energy into human food and poultry converts only around 11 percent of the energy contained in livestock feed into human food.
According to Prescott, “this inefficient system contributes to deforestation, devours water in an increasingly thirsty world, gobbles up vast tracts of land and drives tremendous greenhouse gas emissions – largely through animals’ digestion and manure, as well as energy-intensive feed production.
Chicken wings may be cheap and look modest on a plate, but their environmental shadow stretches across continents. If Americans increased their protein intake by just 25 percent in response to the administration’s new recommendations, maintaining their current ratio of animal to plant protein, it would require about 100 million acres of additional agricultural land each year – an area larger than Michigan, Ohio and Pennsylvania combined – and increase annual emissions by hundreds of millions of tons of carbon dioxide equivalent, according to the World Resources Institute.
Kennedy’s certainly a slick character. His mumbo-jumbo about the safety of vaccines is destructive, his theory about the origin and objective of COVID is crazy and unproved, and his solution to solving the recurring avian flu breakouts is barbaric.
Remember this is the guy who once wrote this critique for a book called The Meat You Eat: How Corporate Farming Has Endangered America’s Food Supply – “The factory meat industry has polluted thousands of miles of America’s rivers, killed billions of fish, pushed tens of thousands of family farmers off their land, sickened and killed thousands of U.S. citizens, and treated millions of farm animals with unspeakable and unnecessary cruelty. In this country, 99 percent of livestock are raised on factory farms.”
Maybe he should have that brainworm rechecked.
‘Round The Trade
Despite what trade observers believe is a priority for Albertsons to lower everyday retail prices and upgrade many of its older locations, earlier this month the retailer posted solid third quarter results. Especially noteworthy was the Boise, ID-based chain’s continued growth in digital sales – up 21 percent – and its efficiency gains made through the use of artificial intelligence. Other metrics were also good including an identical store sales increase of 2.4 percent and the increase of loyalty members by 12 percent. Only Albertsons’ profit dipped – from $400.6 million in the corresponding period in 2024 to $293.3 million for the period ended November 29.
“In the third quarter, we delivered solid results and continued to advance our strategic priorities,” said Susan Morris the nearly 40-year Albertsons veteran who was named CEO last May. “Our investments in technology and AI are fundamentally reshaping how we operate and serve our customers; driving smarter decisions, greater efficiency, and more personalized experiences. Growth in our digital and pharmacy channels, combined with disciplined execution and targeted investments, is strengthening our value proposition and positioning us for success.”
Morris added, “As we look ahead, I am confident that our modernized technology foundation, relentless focus on productivity, and commitment to innovation will enable us to deliver sustainable long-term value for our customers, associates, and shareholders. During the company’s call with financial analysts, Morris said that shoppers are clearly “stretched” and are putting fewer items in their baskets while also prioritizing essentials. She added that Albertsons is focusing on more personal promotions and loyalty enhancements to ensure return trips. Besides digital, Albertsons attributed much of its ID sales increase to strong growth in pharmacy. Offsetting those gains were lost revenue from closed stores and a decrease in fuel prices. In addition, the big retailer noted the temporary government shutdown and related delayed SNAP funding during the third quarter of fiscal 2025 negatively impacted identical sales by approximately 10 to 20 basis points. Viewing the first 40 weeks of fiscal 2025, Albertsons said its capital expenditures were $1.4 billion, which primarily included the completion of 74 remodels, the opening of five new stores, and continued investment in digital and technology platforms. Moreover, in October Albertsons entered into an accelerated share repurchase agreement with JPMorgan Chase Bank, National Association to repurchase $750 million of shares of the company’s common stock. The retailer also announced that its board of directors has authorized an increase to the share repurchase program from $2.0 billion to $2.75 billion. Relatedly, Albertsons paid JPMorgan $750.0 million in cash and received an initial delivery of 35.4 million shares of common stock with a value equal to $600.0 million. Albertsons also provided an updated fiscal 2025 outlook and expects its financial results to be as follows: identical sales growth in the range of 2.2 percent to 2.5 percent (previously 2.2 percent to 2.75 percent); adjusted EBITDA in the range of $3.825 billion to $3.875 billion, including approximately $65 million related to the Company’s 53rd week (previously $3.8 billion to $3.9 billion); adjusted net income per Class A common share in the range of $2.08 to $2.16 per share (previously $2.06 to $2.19 per share); effective income tax rate in the range of 23 percent to 24 percent (previously 23.5 percent to 24.5 percent); and capital expenditures in the range of $1.8 billion to $1.9 billion (unchanged). At the end of third quarter, Albertsons operated 2,243 supermarkets with approximately 300 of those stores operating under the Safeway, Acme, Kings and Balducci’s banners in the Mid-Atlantic…kudos to our buddy Jim Perkins, who earlier this month was named CEO of the Save Mart Companies, the regional supermarket chain with more than 200 supermarkets based in Modesto, CA. Perkins is truly one of the great operators in the business today who joined Save Mart nearly three years ago and became president in August 2024. He replaces his good friend (and another dynamic retailer) Shane Sampson who is retiring. Sampson and Perkins worked together for more than 30 years at Albertsons. After a few years of working outside the grocery business, Sampson was lured back to run Save Mart when private equity firm Kingswood Capital Partners acquired the merchant from the founding Piccinini family. In 2024, Kingswood sold to the Jim Pattison Group, a Vancouver-based privately owned diversified company whose businesses include grocery retailing and wholesaling. We wish Shane the best in his retirement (he’s certainly earned it) and Jim nothing but success in his new gig…Kroger has agreed to pay to pay Lake County, FL $461,000 for closing its Groveland, FL Ocado-driven consumer fulfillment center (CFC). The central Florida county was originally seeking a full repayment of $1.3 million in tax incentives given to Kroger from 2022 to 2024 for its Groveland depot. Kroger has also agreed to pay Ocado $350,000 for closing two other CFCs (in Frederick, MD and Prairie Point, WI) and abandoning plans to open another in Charlotte, NC. Ocado also said it has ended its exclusivity arrangement with Kroger (big whoop) and other international agreements. As it looks to streamline its business and focus on core retail, Kroger earlier this month sold its Vitacost vitamin subsidiary to iHerb Holdings, an Irvine, CA distributor of vitamins, minerals and herbs that currently serves 15 million customers in 180 countries. Kroger acquired Vitacost in 2014 for $280 million as it looked to grow its e-commerce effort and diversify its brand mix. No financial details of the iHerb deal were announced.
Local Notes
A new generation will soon run Stew Leonard’s, the deluxe Norwalk, CT independent retailer that operates eight mega-stores, and seven wine and spirits shops in Connecticut, New York and New Jersey. Stew Leonard Jr., son of the company’s founder Stew Leonard Sr. will relinquish his chief executive duties in four years when he turns 75. His nephew Jake Tavello will become CEO and Stew Jr.’s daughter Blake Leonard will take over the president’s role at the high-volume merchant. Tavello was named COO in 2023, and Blake Leonard oversees Stew Leonard’s Wine and Spirits. Tavello’s mom is Joyce Leonard Tavello, who once headed up the retailer’s HR department. She is Stew Jr’s. sister…Sprouts is poised to open is first New York store on January 30, a 24,000 square foot perishables-driven unit in Centereach, LI (Suffolk County). It’s been a busy 12 months for the Phoenix-based specialty merchant which opened 11 new stores in the Mid-Atlantic – Roosevelt Mall, Oregon Ave. and Rivermark Mall in Philadelphia; Upper Dublin, PA; York, PA and Montgomeryville, PA; Woodbridge NJ; Aberdeen, NJ and Woodbury, NJ; Waldorf, MD: and Haymarket, VA…Wakefern member Inserra supermarkets has added another grocery store to its portfolio. The Fair Lawn, NJ-based upscale operator has acquired the Passaic (NJ) ShopRite from Rafael Cuellar, whose owned the store for 20 years and has been in the supermarket biz for half a century. Cuellar’s one of the real good guys in our industry and one of the most prominent Latinos in the entire grocery business (his parents were Cuban immigrants). He’s to be highly commended for his countless contributions to the Passaic and Clifton communities…last month, Whole Foods opened its fifth small format Daily Shop in “cool” Hoboken, NJ as it tries to capitalize on offering largely convenience and perishables offering to urban shoppers in busy demographically favorable markets. Currently, Whole Foods operates three Manhattan stores – Upper East Side, Hell’s Kitchen and the East Village. In October, it opened its first store outside the New York Metro market in Arlington, Va. A sixth unit, scheduled to open in the Williamsburg section of Brooklyn late last year, is expected to open shortly. A Whole Foods will be opening a conventional store on February 5 when it debuts its newest unit in Cheshire CT. The 42,000 square foot natural & organics unit will be WFM’s 13th store in the Nutmeg State…sadly, there’s too much news to report from the obituary desk, especially for musicians. Bob Weir, 78, who helped found The Grateful Dead in 1965 and has profoundly impacted popular music, has left us. Weir’s multiple skills – singer, songwriter, Americana musicologist and rhythm guitarist – made him an invaluable member of the “Dead” and many other side projects that followed. The excellent New York Times music critic Jon Pareles called him the “invisible thread” – a very accurate description. He may not have been the star of the team, but he was the one player and personality that made the team (band) more successful. And surely he was capable in many areas – as a singer (“Truckin’”), as a songwriter (“Sugar Magnolia”), and was a key component in two of rock’s best albums ever – “Workingman’s Dead and “American Beauty” (both released in 1970). Weir was also a pioneer in creating other new ventures – Dead & Company, Kingfish, Ratdog, Bobby and the Midnites and most recently Bobby Weir & Wolf Brothers which was still active at the time of his death. Weir was inducted into the Rock & Roll Hall of Fame in 1994 as a member of the “Dead” and was also given a lifetime achievement Grammy Award in 2007. If you love music (beyond just the sound), Bob Weir would be anybody’s first-round draft choice…also passing recently passing away were two generally unheralded singers who possessed boatloads of talent. Don Bryant, 83, was a Memphis-born soul singer who was better known as a songwriter and producer for the great Al Green and Ann Peebles (Bryant’s wife). While Bryant had a prolific career behind the stage (154 songwriting credits), he could also sing. So, after a hiatus of more than 30 years, at the urging of his wife and musician Scott Bomar, Bryant resumed singing and in 2016 released his first new R&B album since the early 1970’s – “Don’t Give Up on Love.” In 2017, I saw Bryant at AmericanaFest in Nashville and his sweet soulful voice blew me away. “Don’t Give Up On Love” and his follow up album in 2020, “You Make Me Feel” are both excellent and worth a listen…another unsung great who has left us was Joe Ely. Born in Lubbock, TX. Ely’s vocal style was more rock than country and during his more than 60 years in the music business, he developed into a fine songwriter who had the uncanny ability to assemble excellent musicians when touring. Ely was also a founding member of The Flatlanders, a great band in its own right, in 1972 with high school friends Jimmie Dale Gilmore and Butch Hancock. I’ve been a Joe Ely fane since the mid-70’s and whether live or through his records, the man just had the “feel.” If you listen to Ely’s 1977 album “Honky Tonk Masquerade, you’ll know what I mean. And here’s further proof from Bruce Springsteen, who sang on stage several times with Ely. “He’s got that slight Southern country twang, with a hint of rockabilly. He’s got the depth and emotion of Johnny Cash and it’s as deeply authentic as his Texas roots,” said “The Boss,” who presented Ely with an American Music Honors award from the Springsteen Archives & Center For American Music earlier this year…finally, the shocking murder of Rob Reiner (78) and his wife Michele (65) by their mentally impaired son Nick is so tragic. In a sense, Reiner was much like Bob Weir – he was a man of such diverse talent and his contributions seemed to make every project better, whether it was an actor, screenwriter or director. Most of us know about Reiner’s early career – he was the son of pioneering comedian, producer and director Carl Reiner. And many of us know about his role as Mike “Meathead” Stivic in the iconic TV series “All in the Family” in the early 1970s. But his greatest skill was that of a director in making some of the best American films over the past 40 years including (all these are great films): “Spinal Tap” (1984); “Stand By Me (1986); “The Princess Bride” (1987); “When Harry Met Sally” (1989); and “A Few Good Men” (1992). Additionally, as a film actor, Reiner had a small part early in his career in the hilarious (I’m not exaggerating) comedy, “Where’s Poppa” (1970) directed by his father and starring the hysterical Ruth Gordon. I also admired Rob Reiner for his knowledge and passion over political causes he believed in, even though they may have been unpopular to many. He seemed to really believe in the goodness of people. His long-time friend Ben Stiller may have said it best when he noted: “Thank you Rob for giving us so much joy to hold on to. Life and talent always turned up to 11.”
Jeff Metzger is publisher emeritus of Food World and Food Trade News and founder of Taking Stock LLC, a grocery industry advisory and consulting firm.
