Supermarkets set to introduce 'dynamic pricing' as Bank of England warns of food surges

Joe Sledge
Thu, 09 Apr 2026 10:00:15 +0000

The Bank of England has warned that British consumers could face more frequent price changes as retailers adopt technology allowing costs to fluctuate in response to demand.

A survey by the central bank found that around a third of firms plan to introduce market-responsive pricing tools within the next 12 months, up from roughly one in five the previous year.

The Bank said dynamic pricing involves the use of algorithms, artificial intelligence systems and electronic display technology to adjust prices based on demand, capacity or competitor activity.

This could lead to prices changing depending on factors such as time of day, footfall or weather conditions.

TRENDING

Stories

Videos

Your Say

Major supermarkets are increasingly rolling out electronic shelf labels, although none have confirmed plans to introduce surge pricing.

The Co-operative Group has installed digital price displays in more than 700 stores and plans to extend the technology across its 2,300-plus outlets this year.

Morrisons said it will introduce electronic labels across all 497 of its supermarkets.

Waitrose said it intends to complete a rollout by the end of the year, while Asda is installing the technology in around 250 convenience stores.

Tesco and Sainsbury's are currently trialling the systems.

Retailers said the technology is primarily being used to improve efficiency by replacing paper labels.

Morrisons said the change is focused on operational improvements, while Waitrose said it has "no plans" to introduce dynamic pricing.

The Bank's Deputy Governor, Clare Lombardelli, said: "Digitalisation has radically reduced what economists call menu costs the expense of changing listed prices. Digital pricing allows firms to change prices frequently at negligible cost."

LATEST DEVELOPMENTS

British Gas issues major energy bills update to customers after Middle East ceasefire confirmed

Lidl to open 50 new UK stores with 2,000 jobs created in £600million expansion

American fast food chain Chipotle to open raft of new restaurants on Britain's high streets

Dynamic pricing is already widely used in online retail, with companies such as Amazon regularly adjusting prices.

The travel sector has also adopted the model, with hotel prices now changing at least monthly in around 80 per cent of cases, compared with 15 per cent 20 years ago.

The approach has attracted criticism in other industries.

During the Oasis reunion tour, some customers reported ticket prices rising while they waited in online queues.

Consumer rights expert Martyn James said: "While supermarkets may well give us reassurances that they won't use digital pricing structures for dynamic pricing, who is watching them?

"In almost every other sector, from airline fares to gig tickets, providers have misused their powers to change pricing without any official oversight in real time."

Retail analyst Clive Black said: "The initial drive for these displays is operating efficiency, standardisation and compliance but the longer-term possibility is dynamic pricing."

"Whether that is in the interest of shoppers or shareholders is a moot point."

The British Retail Consortium (BRC) declined to comment directly on the issue, describing pricing decisions as an operational matter for individual retailers.