We covered how Consumer Reports found numerous dark patterns and issues with consent management banners not actually blocking cookies and tracking pixels. Now In a revealing investigation, Consumer Reports (CR) has uncovered troubling practices at Kroger, one of America’s largest grocery chains, highlighting how the company’s loyalty program collects extensive customer data, creates inaccurate shopper profiles, and potentially discriminates against certain consumers through its discount practices. The findings, published last week, raise serious concerns about privacy violations, surveillance pricing, and the misuse of personal information for profit, prompting calls for stronger regulatory oversight.
The Scope of Kroger’s Data Collection
Kroger, which operates stores like Ralphs and Harris Teeter, has built a sophisticated system to track the purchases and behaviors of its estimated 63 million loyalty program members. Over 95% of customer transactions are tied to Kroger’s loyalty card, which requires shoppers to provide personal details such as their name, email, phone number, and address in exchange for discounts and rewards. This data is then enriched with information from third-party data brokers, allowing Kroger to infer sensitive details about customers, including their income, education level, ethnicity, and even health conditions based on purchasing patterns.
A key component of this system is Kroger’s “income predictor,” an algorithm that estimates a customer’s income level to tailor discounts and marketing offers. However, CR’s investigation revealed that these predictions are often inaccurate, misclassifying customers’ income, education, or other characteristics. For instance, one customer, Hazem Salem, obtained his 62-page shopper profile through Oregon’s new data privacy law and discovered that nearly all the information about him such as his gender, education, and income was incorrect.
The Consequences of Inaccurate Profiles
These inaccuracies have real-world consequences. CR found that shoppers deemed to have lower income or less education by Kroger’s algorithm may receive fewer or less valuable discounts compared to those classified as higher-income or “loyal” customers. This practice, known as surveillance pricing, could exacerbate wealth inequalities by charging lower-income shoppers higher prices for the same products.
John Marshall, Capital Strategies Director at UFCW 3000, emphasized the broader implications: “The bigger concern is the possibility that Kroger could use accurate data to target discounts at higher-income shoppers while leaving lower-income consumers to pay full price.” This suggests that even when Kroger’s data practices work as intended, they may disproportionately harm vulnerable consumers.
Kroger’s Lucrative Data Business
Kroger’s data practices extend beyond its stores. Through its “precision marketing” division, operated by its data science subsidiary 84.51°, Kroger sells customer data to over 50 U.S. companies, including data brokers, tobacco companies, financial institutions, and marketing firms. This “alternative profit” business, which includes precision marketing, accounts for more than 35% of Kroger’s net income, with estimated profits of $527 million in 2024 and projections of $825 million by 2027.
One customer’s profile, obtained by CR, revealed that their data had been shared with entities like Soda Health, a healthcare tech company, and Solutran, a fintech platform processing SNAP benefits, raising concerns about unwanted solicitations and spam. This widespread data sharing, while legal under Kroger’s privacy policy, has been criticized as an “out-of-context” use of consumer information, where data collected for grocery transactions is repurposed for unrelated marketing purposes.
Lindsay Owens, Executive Director of Groundwork Collaborative, remarked, “Consumers should be able to go to the grocery store and put together a meal for their families without finding themselves on the menu.”
Allegations of Surveillance Pricing and Misleading Discounts
Kroger’s data practices are part of a broader controversy surrounding its pricing strategies. A separate CR investigation earlier in May 2025 found that Kroger has been overcharging customers by displaying expired sale tags, causing shoppers to pay full price for items advertised as discounted. In response, CR launched its “Make the Price Right” campaign, which includes a petition demanding that Kroger offer the same discounts to all loyalty program members, regardless of their inferred income or loyalty status.
While Kroger denies personalizing product prices, it admits to using “demographic or online behavioral data” to tailor discounts based on customers’ prior purchases and interactions. This admission has fueled concerns about surveillance pricing, where prices are adjusted based on inferred customer characteristics, potentially without their knowledge or consent.
Calls for Accountability and Regulation
The CR investigation has sparked widespread criticism, with experts and advocates calling for stronger privacy protections. Justin Brookman, CR’s director of technology policy, stated, “We need to rein in the rampant overcollection and misuse of consumer data and ensure that companies like Kroger are held accountable when they violate the trust of consumers and harm their pocketbooks.”
Posts on X reflect public outrage, with users accusing Kroger of exploiting shopper data for profit and engaging in discriminatory pricing practices. Some posts also reference unverified claims about Kroger using facial recognition technology to enhance its surveillance pricing, though Kroger has denied these allegations.
Matt Schwartz, a CR policy analyst, emphasized the need for regulatory action: “It’s especially unfair if those discounts are based on personal information you likely didn’t even know companies were collecting.” Advocates are urging lawmakers to enact stronger state and federal privacy laws to curb surveillance pricing and limit data sharing.
Kroger’s Response
Kroger maintains that its practices are transparent and outlined in its privacy policy, which customers agree to upon joining the loyalty program. The company claims it does not personalize product prices but uses data to offer “relevant” discounts based on purchase history. Kroger also allows customers to request corrections to inaccurate data in their profiles, though it considers details about its loyalty classification process proprietary.
The Path Forward
The Consumer Reports investigation has brought Kroger’s data practices into sharp focus, highlighting the tension between personalized marketing and consumer privacy. As grocery chains like Kroger increasingly rely on data-driven strategies to boost profits, the potential for privacy violations and discriminatory pricing grows. CR’s findings underscore the need for robust data minimization rules and transparency to ensure that consumers are not exploited for their personal information.
For now, shoppers are left to navigate a system where their loyalty comes at the cost of their privacy. As one customer, Hazem Salem, noted, “It’s creepy how much they assume to know about me, and it’s basically all wrong.” His experience serves as a stark reminder of the risks posed by unchecked data collection in everyday activities like grocery shopping.
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