This spring, surveillance pricing for groceries hit a nerve for Canadians, sparking a flurry of headlines and policy action.
In March, Manitoba became the first government in Canada to introduce legislation to ban surveillance pricing, with a focus on grocery prices. The law was enacted in June. Federal NDP leader Avi Lewis also advocated for banning surveillance pricing, accompanied by NDP MP Don Davies’ defeated motion in the House of Commons in April. The same week, the Ontario Liberals introduced the Fair Grocery Prices Act, currently awaiting second reading, which proposes a similar ban.
You might find this recent surge surprising, given the ubiquity of these practices. Airlines started experimenting with algorithmic pricing in the 1980s. Consumers are used to surge pricing for flights, hotels and ride-sharing services. Terms like “surveillance capitalism” have even made it into the public vernacular. Yet organized public and policy response to surveillance pricing in general has been lacklustre.
Why are people paying attention now? And what should governments do about it? There are several policy levers that the federal, provincial and territorial governments can use to restrict surveillance pricing in grocery stores before the practice becomes widespread.
Food prices on the rise
Whereas flights are generally considered a luxury purchase, groceries are essential. The idea of paying even more for groceries leaves a bad taste in Canadians’ mouths as food insecurity and the cost of essentials are on the rise.
Nearly one in four households across Canada was food insecure in 2025. The average cost of groceries was 27 per cent higher in 2025 than in 2020. Even as overall inflation began to plateau in 2022, grocery prices continued to rise.
In a 2023 Mintel survey, 83 per cent of surveyed Canadians believed grocery retailers were using inflation as an excuse to price gouge, and 94 per cent believed it especially harmed lower income individuals.
When Loblaw chairman Galen Weston was called to Parliament Hill along with the heads of Canada’s other big grocery chains, he insisted that “the idea that grocers are causing food inflation is not only false, it’s impossible.” Many people had trouble buying it, accusing grocery giants of “greedflation.”
While public awareness is still nascent, a 2026 Abacus survey showed that more than half of Canadians were at least sometimes “suspicious of algorithmic pricing” and believed that charging different amounts for the same product was “unfair.”
Why groceries changed the debate
Artificial intelligence systems significantly expand grocery retailers’ ability to test and optimize customers’ “willingness to pay.” There are two important technologies in grocery retail that enable surveillance pricing.
The first is the shift from paper to electronic shelf labels (ESLs). Big Canadian grocers are quietly expanding ESL systems across the country, although their e-reader-style screens are rather inconspicuous. Stores can instantly change prices on ESLs, manually or through algorithms using data on markets, inventory, competitor prices and even the weather.
While consumers have raised transparency and competition concerns related to ESLs, Canadian grocery giants Loblaws, Metro and Sobeys claim that the recent expansion of ESLs is not related to algorithmic pricing.
The second is platforms that collect massive amounts of customer data. It’s not just about finding the most strategic price for ESLs, which anyone would have to pay. Retailers want to make predictions about and nudge the behaviour of individual shoppers or customer segments.
Surveillance pricing requires massive amounts of data about individuals. North American grocery titans like Loblaws, Kroger and Walmart have petabytes of longitudinal data on individual grocery purchases and habits. Through reward programs and grocery apps, retailers can infer information about individuals and households: What do you buy most regularly? When do you shop? Are you likely to buy more when an item is on sale? Do you respond to discounts in the app?
Some grocery giants have the added benefit of tracking behaviour beyond groceries. For example, Loblaw owns more than 20 regional and submarket banners for grocery, banking, apparel and pharmacy retailers. With each PC Optimum card scanned, more data is added to customer profiles.
How does it work?
Retailers have continuously refined strategies for personalized marketing since the early 2000s. Remember the controversy about the accuracy of Target’s “pregnancy predictor score” based on shopping habits? Now, U.S. grocery giant Kroger is facing backlash for its AI-based “income predictor score,” which includes inferences about customer gender, household structure and education.
When ordering groceries online or checking coupons in a grocery app, you might see a different price than your neighbour for the same item at the same time. A 2025 investigation found up to a 23 per cent difference in price for simultaneous identical purchases from Instacart. A peer-reviewed study with hundreds of thousands of price observations from Walmart and Amazon Fresh in the U.S., both in store and online, found similar evidence.
The price you see on the same device may be different depending on the time of day or where you open the app. Investigations revealed that opening the Target shopping app in or near the store changed the price presented using location data. The assumed “willingness to pay” is higher when the shopper already made the effort to go to the store.
There are also inequity concerns when retailers influence food choices through surveillance pricing, potentially targeting cheap ultra-processed foods to low-income shoppers, and limiting discounts to those with a smart phone and the free time to continually check and compare prices.
Governments already have tools to act
Because fully autonomous surveillance pricing in Canadian grocery stores is not yet widespread, there is an opportunity to be proactive.
There are at least three policy levers available to governments to restrict surveillance pricing: privacy law; federal competition law; and consumer protections, mostly at the provincial and territorial level.
Community food systems are critical to Canada’s national security
The recently unveiled National Artificial Intelligence Strategy recommends strengthening privacy law, calling “surveillance pricing” an “inappropriate” use of personal information. Bill C-36, which quickly followed and is currently awaiting second reading, expands the definition of “personal information” in privacy law to include “information that is inferred about the individual.” If enacted, this could apply to inferred information used to maximize consumers’ willingness to pay via surveillance pricing (even though this is not explicit in the bill).
Provinces and territories may also leverage their existing privacy law. For example, in 2025, Quebec privacy regulators prevented Metro from using facial recognition through the cameras in grocery stores, because it would not meet the expectations of express consent protected by the Quebec IT Act.
Next is competition. Ontario Premier Doug Ford dismissed the NDP’s nonbinding motion to ban surveillance pricing as being “against the free market.” He claimed there is “no better way of letting people get lower costs, no matter if it’s cars or homes or groceries, than competition.”
But algorithmic pricing could be anti-competitive, especially in a grocery oligopoly like ours.
The new National Food Security Strategy also recommends stronger privacy law and leveraging recent changes to the Competition Act to better respond to collusion and price setting enabled by algorithmic pricing.
As outlined by the Competition Bureau, while the Competition Act does not prohibit surveillance pricing in general, it could be used to sanction applications of surveillance pricing that enable price-fixing, anti-competitiveness or deceptive marketing. (Of course, grocery price fixing is top-of-mind for many with the bread class action settlement in the headlines.)
Finally, there are consumer protections. Manitoba’s Bill 49 is an example of restricting surveillance pricing through consumer protections, by labelling it an “unfair business practice.”
At a time when food insecurity remains a persistent problem across the country and many Canadians are struggling to put food on the table, governments should act to curb the use of surveillance pricing by large grocers before the practice becomes entrenched.
