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by estearum
47 days ago
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There's nothing unique about dynamic pricing in this situation except more efficient price discovery which I'm not sure is a bad thing for anyone. > Raising prices for consumers who won't comparison shop will do nothing to change the marginal cost of serving a consumer who does Of course it would. In a competitive environment (which grocery stores are), this excess capital gets reinvested into beating the competition. |
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That's not true though. Excess capital does not necessarily get reinvested in an efficient market. If that were the case, companies in relatively efficient markets would spend a very small portion of their free cash flow on dividends and share buybacks, which is not the case.
Let's look at Kroger specifically: https://ir.kroger.com/news/news-details/2026/Kroger-Reports-...
Of $7.2B free cash flow in 2025 they spent $3.9B on capital expenditures and about $3.6B on dividends and buybacks (those numbers don't add up because of things like loans, sale of assets, and stock issuance).
Additionally, even if companies in competitive markets did reinvest all their excess profits from personalized pricing, the benefits would only accrue to consumers that the algorithm thinks are price-sensitive.