Shoppers may face higher prices as retailers look set to use digital labels that could change the cost of products based on demand.
The Bank of England warned that these ‘market-responsive pricing tools’ will be adopted by one in three companies in the coming year, up from one in five in the year before.
These ‘dynamic prices’ will change based on algorithms and AI, with the labels adjusting to ‘demand, capacity or competitors’ prices’, according to a business survey commissioned by the Bank.
Factors that could affect these prices may take into account the weather, the time of day, and how busy the shop is. For example, if it is a hot day, then the price of sunglasses may be increased.
This is something that online retailers, like Amazon, have already adopted. Hospitality and travel businesses do much the same, with prices changing based on popularity or times of the year.
The study then suggests that electronic labels in supermarkets could be the next frontier – something which is ‘already widespread in Europe’.
UK retail food prices are already 38 per cent higher than pre-Covid levels and experts fear further significant increases if disruption caused by the war in Iran continues.
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