Supermarkets might adopt 'surge' prices

A Bank of England warning this week landed on one of the most sensitive parts of household life: the price tag on dinner. The Bank said more companies are moving toward pricing tools that react to demand, and supermarkets are now testing the kind of digital shelf labels that make fast price changes possible. (bankofengland.co.uk) (independent.co.uk) That does not mean your local store is already changing the price of milk at 5 p.m. because people are rushing in after work. The reporting around this story says there is no evidence of algorithm-driven supermarket surge pricing in Britain right now, but the technology being tested would make it much easier to do later. (standard.co.uk) (independent.co.uk) The key phrase from the Bank is “menu costs.” That is the old expense of changing a listed price, like printing new labels, sending staff down every aisle, and making sure the shelf matches the checkout. (bankofengland.co.uk) Digital shelf labels shrink that cost to almost nothing. A small screen on the shelf can be updated from a central system in seconds, so a retailer no longer needs a worker with a pricing gun and a stack of paper tags. (bankofengland.co.uk) (fmi.org) That is why the Bank’s survey matters more than the supermarket headlines. In a survey of more than 1,600 firms, the share using “market-responsive pricing tools” was 21 percent, and the share expecting to use them within a year rose to 31 percent. (bankofengland.co.uk) Britain’s biggest concrete example is Morrisons. In October 2025, Morrisons said it would roll out more than 10.8 million electronic shelf labels across all 497 supermarkets, with the rollout starting in early 2026. (morrisons-corporate.com) Morrisons presented the switch as an operations upgrade, not a plan to charge more at busy hours. The company said the labels would automate pricing work, improve promotions and loyalty offers, and free staff to spend more time on customer service. (morrisons-corporate.com) Retail groups also have a simple defense for the technology: paper labels create mistakes. The Food Industry Association in the United States said electronic shelf labels help stores keep the shelf price aligned with the checkout price and reduce paper waste, which is the cleanest public case for installing them. (fmi.org) The fear comes from what the same screens could do next. If a store can change one yogurt price instantly across hundreds of branches, it can also test whether shoppers will pay more before a football match, during a heatwave, or in the hour when commuters flood in. (bankofengland.co.uk) (telegraph.co.uk) The Bank’s own takeaway is that technology is no longer the main barrier. Clare Lombardelli said adoption in supermarkets may be held back more by reputational risk than by the hardware, which is another way of saying stores may worry shoppers will see changing food prices as unfair even if the software works perfectly. (bankofengland.co.uk) (lbc.co.uk) So the immediate story is not that supermarkets have flipped a switch. It is that the Bank of England is publicly describing a world where the technical obstacle has largely disappeared, one major chain is already replacing paper tags at national scale, and the remaining question is whether shoppers will tolerate grocery prices that move more like airline tickets. (bankofengland.co.uk) (morrisons-corporate.com)