Kroger announces big store change amid price gouging accusations

Last month, Kroger (KR) , which has over 2,000 stores across the country, was accused of squeezing extra money out of its customers as they battle inflation and higher costs of living.

According to a monthslong investigation from Consumer Reports, The Guardian and the Food & Environment Reporting Network, it alleges that Kroger shoppers have unknowingly been paying full price for a plethora of items in stores that were advertised as being on sale or discounted.

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The investigation recruited people to shop at 26 Kroger and Kroger-owned stores, and they found expired price tags that led to overcharges on over 150 grocery items, such as salmon, Cheerios cereal, Nescafé instant coffee, etc.

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One-third of the price tags were expired by at least 10 days, and the prices of five of the items were expired by at least 90 days. The average overcharge was $1.70 per item.

While Kroger employees were quick to correct pricing errors when customers flagged them, many went unnoticed.

The investigation into Kroger’s prices comes after customers in Ohio, Utah, California and Illinois filed class-action lawsuits over incorrect pricing in the grocery chain’s stores.

In response to the investigation, a Kroger representative told the organizations in a statement that it reviews “millions of items weekly to ensure our shelf prices are accurate.”

“While any error is unacceptable, the characterization of widespread pricing concerns is patently false,” said the Kroger representative.

Kroger was recently accused of overcharging its customers. 

Image source: Shutterstock

Kroger makes a bold move

Shortly after the investigation’s results were published on May 14, multiple Kroger employees told Consumer Reports that managers have been instructed to correct all price tag errors in stores within “a matter of days.”

Kroger also announced on May 15 that it was hiring 15,000 new associates to “enhance the customer experience,” in roles such as “cashiers, baggers, deli bakery clerks, pharmacy technicians, Kroger delivery drivers,” according to a press release.

“We invite future associates to make a home at Kroger and discover a fresh opportunity with competitive pay and benefits, flexible schedules and a promise to invest in your future,” said Tim Massa, Kroger chief associate experience officer, in the press release.

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Kroger highlighted that it offers “on-demand, role-specific training” to employees and perks such as education and tuition reimbursement, free financial coaching, health care, discounts, etc.

Kroger’s prices were previously put under a microscope

The investigation into Kroger’s prices comes after its senior director for pricing, Andy Groff, was questioned in federal court last year about the grocery chain’s pricing. 

During a Federal Trade Commission hearing over Kroger’s plan to purchase its rival Albertsons, Groff was questioned about an email he wrote in March to his bosses that stated that Kroger had raised its prices higher than inflation.

“On milk and eggs, retail inflation has been significantly higher than cost inflation,” wrote Groff in the email.

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In response to questions about the email, Groff testified that Kroger’s objective was to “pass through our inflation to consumers.”

Last year, Kroger also faced an investigation from several lawmakers over its use of digital price tags, which the grocery chain claims allows employees to update prices for items within seconds.

In an Aug. 5 letter to Kroger CEO Rodney McMullen, U.S. Sens. Elizabeth Warren and Bob Casey revealed that they will be launching an investigation into the company’s digital price tags, which is present in some of its stores, as they are worried that the technology will open the door for price gouging.

“These digital price tags may enable Kroger and other grocery chains to transition to ‘dynamic pricing,’ in which the price of basic household goods could surge based on the time of day, the weather, or other transitory events – allowing stores to calibrate price increases to extract maximum profits at a time when the amount of Americans’ income spent on food is at a 30-year high,” reads the letter.

Related: Kroger has alarming plans for digital price tags, lawmakers say