Walmart is facing customer criticism after introducing an AI-powered pricing system. Some shoppers are raising concerns about how the technology could affect product costs. The retailer recently secured patents for tools that use algorithms to forecast demand and recommend pricing, prompting reactions from users who worry about potential price fluctuations.“This isn’t innovative, it’s exploitative,” one user wrote, responding to this development on microblogging site X (formerly Twitter). While other users added, “Oh this is not going to go well at all,” and “Capitalism breeds innovation, and the innovation is dynamically price gouging people based on how much they need something.”According to filings cited by the Financial Times, the system is designed to analyse demand across categories such as food, clothing, housewares, and more to dynamically adjust pricing. The rollout, along with the use of digital shelf labels, has led to concerns among customers who rely on Walmart for affordability amid rising living expenses.

What are Walmart’s new pricing tools and how they work

The “demand forecasting and price recommendation” tool outlined in Walmart’s patent would use data linked to individual consumers, including purchase history, pricing patterns, payment methods, and identifiers such as passport or driver’s licence numbers.Walmart also received a patent in January for a system that can “dynamically and automatically” update product prices online based on demand and popularity, the FT report adds.The US Patent and Trademark Office has granted Walmart nearly 50 US patents so far this year. However, the company stated that neither the recent nor the earlier patents pertain to dynamic pricing. It added that the January patent focused on markdowns, while the latest tool is intended to support merchant decision-making.“We don’t participate in surge pricing,” a Walmart spokeswoman told FT.Despite these assurances, some experts and consumers have raised concerns. “Dynamic pricing or anything that smells like it is playing with fire,” Matt Hamory of AlixPartners told FT.He pointed to “the goodwill that you can lose by getting customers to think or suspect or worry even slightly that you are doing things with pricing that are to your benefit and their detriment.”Alongside these developments, Walmart is expanding the use of digital shelf labels to replace paper price tags. Walmart’s electronic displays enable real-time price updates, facilitating quicker and easier changes across stores. More than 2,300 locations in the US are already using the system, with plans to expand it across all stores within the next year.Critics have said the labels could be “used to mislead consumers in the future by changing prices too often or in confusing ways,” according to the Retail Industry Leaders Association, which added that “fears about widespread misuse tend to remain hypothetical.”Walmart said the labels are intended to simplify price updates rather than replace manual processes, and that store pricing remains “consistent regardless of demand, time of day or who is shopping.”“Price updates are still people-led and support Walmart’s Everyday Low Price promise,” the company added.Meanwhile, retail expert Bob Phibbs said the approach reflects existing industry practices. He said, “Every retailer already does this with a spreadsheet and a gut feeling. Walmart just automated it. Prices can drop just as fast as they rise.”