New Research Alert: Debunking Myths About Electronic Shelf Labels & Surge Pricing

I am excited to share fascinating new research (Stamatopoulos et al., 2025) that empirically examines the impact of Electronic Shelf Labels (ESLs) on grocery pricing. ESLs allow retailers to adjust pricing at the shelf immediately in response to competitor activity, stock levels, or sales volumes.

Some regulators have raised concerns that ESLs would lead to price gouging. For example, last year Massachusetts Sen. Elizabeth Warren and former Pennsylvania Sen. Bob Casey raised concerns that retailers use of ESL could allow stores to gouge consumers at busy shopping times or during weather events: "Widespread adoption of digital price tags appears poised to enable large grocery stores to squeeze consumers to increase profits." Warren against dynamic pricing.* According to Food Manufacturing, lawmakers in Rhode Island and Maine have introduced bills to limit the use of ESLs. In Arizona, state Rep. Cesar Aguilar recently introduced a bill that would ban them altogether. Food Manufacturing ESLs.*

Contrary to recent regulatory concerns, this new research found no evidence of surge pricing following ESL adoption by major US grocery retailers. This directly refutes claims made by policymakers and advocacy groups alleging ESL-enabled price gouging. Rather, the research highlights that ESLs are primarily used for efficient price management (markdowns, promotions) rather than exploitative dynamic pricing.

This is significant for antitrust review of retail mergers and acquisitions, as it challenges assumptions about the anti-competitive potential of dynamic pricing technologies. This research provides a strong argument against broad bans on and supports a more nuanced approach to evaluating dynamic pricing practices. It underscores the importance of data-driven analysis in evaluating the impact of pricing behaviors and innovation on consumer welfare.

_{* The research and sources referenced in this article are third party sources and not the proprietary work of White & Case LLP or its affiliates.}

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_{This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.}

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