Technology to rip you off – coming to a supermarket near you
For as long as I have been around, the local supermarket and grocery store were the bastions of “what you see is what you get.” You picked up a jar of Vegemite or a tin of baked beans, looked at the price sticker stuck on the lid or the paper tag on the shelf, and you knew exactly what you were going to pay when you arrived at the checkout.
But if companies and their board members have their way, that certainty will soon evaporate. And it will be replaced with something far more fluid, algorithmic, and, quite frankly, offensive and invasive and designed to handicap you.
It is called Surveillance Pricing, and if the government allows it, it will be the icing on the cake of the rip-off society we now live in, where Aussies are constantly shafting other Aussies.
From manufacturers shrinking contents but keeping the packaging the same, to petrol stations raising prices before their costs have gone up; from bus companies charging fuel levies of $15 for each of the 50 people they transport to an excursion instead of the $60 they pay extra in fuel, to fake discounts at the super-market and to airlines charging your credit card a different price to the one advertised, the cost of living crisis is made worse by this corporate greed and indifference to the well-being of fellow humans.
Now, they’d like to charge you even more.
Try this one for fun. Jump online, onto one of Australia’s domestic airline websites. Search for a flight to a specific location on a specific date and time, and write down the price. Then close the browser and leave your computer for 45 minutes. Return to the same computer or laptop, navigate to the same airline’s website and search for the same flight again. Is it more expensive? Don’t be surprised if it is. Alternatively, ask a friend in another state or suburb to look up the same flight. Same price? Don’t be surprised if it’s different. You’ve been tracked via cookies or device fingerprinting. Welcome to the first versions of surveillance pricing. Different prices for different people, based on what the company knows about you and your behaviour.
From paper tag to the black box
In physical stores, one of the pieces of hardware of this revolution is the Electronic Shelf Label (ESL). These small e-ink screens look innocent enough, but they’re the front end of a massive data engine. In the United States, Kroger has been a pioneer with its “EDGE” shelving technology. In Australia, the rollout has been more cautious but no less deliberate.
The danger isn’t the screen itself; it’s the algorithm behind it. Unlike a paper tag that takes a staff member an hour to change, an ESL can be updated in milliseconds. This allows stores to implement Dynamic Pricing, a practice already common among airlines and Uber.
Here are some examples of what you can expect in-store and online from the technology supermarkets would have you believe is innocuous:
- Surge pricing: Raising the price of cold water or ice cream on a 40°c day.
- Phone battery: Charging you more when your phone battery is low, and you just have to pay quickly and get home.
- Fast delivery: Charging you more when you are rushed and therefore not price sensitive.
- Phone brand: Charging you more if you use an iPhone to pay – you must be wealthier.
- Location: Charging customers more where the supermarket has few competitors and customers have no alternatives.
- Disadvantage advantage: Charging more on a day when the trains or buses aren’t operating, and you can’t travel elsewhere.
- Peak-hour hikes: Increasing the cost of bread, milk and dinner essentials at 5:30 pm when parents are rushing home.
- Inventory shifts: Lowering the price of meat as it nears its expiry date – not to save you money, but to prevent a loss for the store.
- The U.S. investigation: Privacy as a luxury
In early 2026, the U.S. House Oversight Committee and the Federal Trade Commission (FTC) launched a sweeping inquiry into “Individualised pricing.” The concern is no longer just that prices change for everyone – it’s that they change for you.
Recent reports provided to the committee revealed that some artificial intelliogence (AI) -based pricing tools could charge identical products differently from one customer to the next by as much as 23 per cent. This is “Surveillance Pricing” in its purest form: using your geolocation, browsing history, and even your phone’s battery life to determine your “pain point” – the maximum you are willing to pay before walking away.
- The Australian Frontline: Coles, the ACCC, and the “Great Value” irony
While the U.S. fights over data privacy, Australia is embroiled in a legal battle dubbed the “Case of the Century.” The Australian Competition and Consumer Commission (ACCC) has taken major Australian supermarkets to court over allegations of “fake discounts” – the practice of hiking prices for a brief window, only to “drop” them to a price still higher than the original.
If proven, we can confidently say that teams of people who work in the head offices of the major supermarkets – with their happy smiling faces all on LinkedIn – actively plot and scheme to lie to their customers and rip them off. Do you really want to give these same people Electronic Shelf Labels (ESL) technology?
The marketing spin
Coles has recently doubled down on its “Great Value, Hands Down” campaign. The advertisements are masterclasses in “techno-optimism.” They feature upbeat music, bright red “Down Down” hands, and smiling team members. The marketing makes light of the technology, framing ESLs as a way to “save paper” or “free up our team to help you.”
“By automating our labels, we’re putting the focus back on service,” the ads suggest.
But behind the “Great Value” branding, the 2026 ACCC filings suggest a darker reality: a system that will make it impossible for consumers to track real value or compare prices. When a price can yo-yo around five times in a week, or even fives times in a day, the consumer loses something called ‘price memory’, which is their only weapon.
Quite frankly, Electronic Shelf Labels (ESL) technology and any form of surveillance-informed pricing must be banned.
Your loyalty card is providing all the information they need
If we think of ESL as the engine of surveillance pricing, your loyalty card – Flybuys or Everyday Rewards – is the fuel. In 2026, Coles 360 (the retailer’s media arm) reported a massive uptick in revenue. They aren’t just selling groceries; they are selling you through your data.
By scanning your card, you give the store a map of your vulnerabilities. If their AI agents know you have a newborn, it knows you must buy nappies, regardless of a 10 per cent price hike. That’s a loyalty tax.
When you tap your loyalty card, you think you are saving, but ultimately you will pay more because the store knows everything about your budget, and you know nothing about their margins.
Soon, major Australian supermarket AI agents will use demographic data to set higher baseline prices in captive communities where resides have fewer transport options to shop elsewhere.
Reclaiming your rights to privacy, transparency and honesty
As of May 2026, legislative pushback in the U.S. has commenced. With Trump hitting his second-term low in the polling averages, with 39 per cent of Americans approving of his job and 57.7 per cent disapproving, and with U.S. first quarter Gross Domectic Product (GDP) growth numbers showing that most of the increase in economic activity has been driven by intangible items like intellectual property and software, which don’t require workers, Senator Cory Booker, along with Elizabeth Warren, Martin Heinrich, Chris Murphy, and Mazie Hirono, introduced an important bill that would genuinely discipline Wall Street and reorder corporate America to serve Americans.
Meanwhile, Progressive Democrats, led by Texas Congressman Greg Casar, introduced the Progressive Caucus plan on affordability, which is not unlike the 1994 “Contract with America” introduced by Newt Gingrich. One of the most significant of the ten proposals is a ban on surveillance pricing, which they will pursue through a bill called the Stop AI Price Gouging and Wage Fixing Act drafted to prohibit personalised price setting. Likewise, Maryland and California have introduced bills to ban Surveillance Pricing in grocery stores, arguing that food is a human right, not a data-harvesting opportunity. New York has taken a softer option, not banning it, but requiring disclosure when prices are set by algorithms – they may as well make it Open Season.
This technology already exists, and through its advertising, Coles is flagging its intent to introduce ESL here. You will need to write to your MP and support laws that ban the technology and enforce price stability, such as setting prices once for each batch or delivery of goods.
Alternatively, you can shop without a loyalty card or use cash to break the data link, but this is only a short-term fix because it won’t prevent many of the surge-pricing examples I’ve highlighted above, such as during dinner times and on hot days.
While some suggest we should shop at analog stores, these stores will eventually fold and go bust as big supermarkets increase their margins, allowing them to afford more aggressive competitive tactics.
And it won’t end at supermarkets.
As a fund manager, you might think I would be cheering for higher margins and profits that this technology can deliver, but I value social cohesion and support for the disadvantaged far more, as we all should. This technology will undermine both, and to what end?
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.
