‘You’ll end up hurting the poor customer’: Curley slams Seattle’s push to ban dynamic pricing at grocery stores

The Seattle City Council is considering an ordinance that would bar companies from using algorithms and personal data to set prices, a practice critics call “surveillance pricing.” KOMO News reported this week that grocery retailers worry the proposed Fair Pricing and Transparency Ordinance is written broadly enough to put loyalty discounts and coupon programs at risk, even though the ordinance is intended to allow them.

KIRO host John Curley argued on “The John Curley Show” on KIRO Newsradio that dynamic and personalized pricing isn’t new or predatory, and that banning it would hurt the same shoppers the city council said it wants to protect.

“Some consumers paying higher prices than others. Let’s see, how long has that been around? Well, I know 40 years when it came to American Airlines,” Curley said. “If somebody wants to buy the ticket on the seat to fly somewhere, and they want to fly, let’s say Sept. 5, right? The price is $100. But then some other guy finds out from his boss, ‘Hey, I need you in Atlanta by Monday.’ Guess what? He’s going to pay more than the other guy. Why? Because he needs to be in Atlanta. So what happened was they’re both selling the exact same seat, but it depended on the demand and the need of the one flyer compared to the other flyer.”

Curley traces personalized pricing back to ancient haggling

Curley separated the ordinance’s two targets — demand-based pricing, which he compared to Uber surge pricing, and personalized pricing based on a shopper’s own data — arguing the latter isn’t new either.

“This has been around, let’s see, I’m going to do the math, since 3000 B.C. They’ve been doing this from Morocco to Mexico. It was called haggling,” Curley said. “It happens when you go to buy a car. The salesman is looking at your credit score, your down payment, your interest in the car, and then you haggle over the whole thing. Bias can be presented in there because the guy might judge you by your credit score, might judge you by the clothes you’re wearing, might charge you different things.”

Curley argued that as long as pricing is transparent and competitors can see what others are charging, dynamic pricing benefits shoppers rather than harming them.

“That type of dynamic personal pricing works for everybody as long as it’s transparent, as long as everybody, and that is the competitors in the marketplace, can see exactly what you’re thinking about buying,” Curley said. “As long as the market is open and everybody can see it, there’s no problem with it.”

Curley cites Walmart’s 2022 pricing trial and the blocked Kroger-Albertsons merger

Curley pointed to a 2022 pricing trial by Walmart as evidence that algorithmic pricing has minimal real-world effect on shoppers, and criticized regulators over the blocked Kroger-Albertsons merger.

“The surge happening was 0.0042% of products were affected, and the price change was 0.006%. Hardly any effect at all,” Curley said. “Kroger’s and Albertsons’ merger got blocked, and then Kroger’s ended up closing 60 of their stores, which is about 2% of their entire group of stores. The reason they got blocked is because the government thought somehow that Walmart and Amazon were not considered grocery stores. Ridiculous.”

Curley said he supports lighter government involvement in pricing, arguing existing regulators are already positioned to police bad actors without a blanket ban.

“We already have the FTC, we already have the FCC, we already have a whole bunch of government involvement in the marketplace,” Curley said. “As long as it’s open and fair and transparent, and everyone can see it, we will all benefit. But this idea that we want to help the poor customer, you’ll end up hurting the poor customer. It happens all the time.”

Watch the full discussion in the video above.

Listen to John Curley weekday afternoons from 3 – 7 p.m. on KIRO Newsradio, 97.3 FM. Subscribe to the podcast here.

Follow @https://twitter.com/jcurleyshow