Legislative Initiatives Mount to Lower Grocery Prices and Ban Surveillance Pricing
This article first appeared in Presence Marketing’s March 2026 newsletter.
By Steven Hoffman
As the food and beverage industry moves deeper into 2026, the narrative governing the grocery aisle has shifted from simple supply chain economics to a complex battlefield of technology, privacy, and political maneuvering. While headline inflation has ostensibly cooled from its post-pandemic peaks, the lived reality for the American consumer remains one of relentless sticker shock—a reality that is now precipitating a wave of legislative interventions at both the state and federal levels.
For retailers and manufacturers, the signal from Washington and state capitals is clear: the era of unrestrained pricing strategies may be drawing to a close. A bipartisan recognition of consumer distress is fueling a two-pronged legislative assault. On one flank, lawmakers are targeting the raw costs of goods through tax repeals and affordability agendas. On the other, they are taking aim at the very mechanisms of modern retail—specifically, the emerging use of artificial intelligence and data-driven "surveillance pricing."
The Economic Context: A Slowing Pace, But Rising Pain
To understand what’s driving the current legislative landscape, one must look at the data. According to NPR, grocery prices have surged between 30% and 40% since 2019, fundamentally altering the economics of the American household.
While the pace of increases is technically slowing, the trajectory remains upward. As reported by Progressive Grocer, the January Consumer Price Index (CPI) from the U.S. Bureau of Labor Statistics (BLS) showed a 0.2% rise in food-at-home prices for the month and a 2.1% increase over the last 12 months.
The pain is not distributed equally across the store. The data shows that five of the six major grocery store food group indexes increased yet again in January:
Cereals and bakery products rose 1.2%
Dairy and related products increased 0.8%
Meats, poultry, fish, and eggs inched up 0.2%
Both the nonalcoholic beverages and fruits and vegetables category saw a slight rise of 0.1%
Independent analysis paints an even starker picture. The ConsumerAffairs Datasembly Shopping Cart Index reported a nearly 6% year-over-year climb in January. The cost for their basket of everyday items jumped from $147.71 in January 2025 to $156.43 in January 2026. This $8.72 increase was driven largely by coffee, cereal, and paper products, though staples like eggs and butter offered modest relief.
The Drivers: Tariffs, Labor, and “Sentiment”
Industry analysts are quick to point out that these price hikes are not occurring in a vacuum. A complex web of federal policy decisions is actively influencing shelf prices.
Foremost among these are tariffs. A report from the Council on Foreign Relations highlights that 65% of Americans now view tariffs as a primary driver of unaffordability. The Yale Budget Lab estimates that recent trade policies will likely increase food prices by 1.4% in the short run. This is already visible in the coffee aisle, where prices soared after the Administration imposed tariffs as high as 50% on major importing countries like Brazil—a move Consumer Federation of America likens to a "$200 billion federal sales tax."
Furthermore, labor dynamics linked to immigration enforcement are creating disparities between retail and foodservice. Prices for "food away from home" rose significantly more (4.1%) in 2025 than "food at home" (2.4%), reflecting the higher proportion of labor costs in prepared foods.
However, Jayson Lusk, head of agricultural economics at Purdue University, notes a critical psychological component for the industry to consider. "Consumer anxiety is increasingly driven by food prices and tariffs, not inflation as a general economic concept," Lusk told the Council on Foreign Relations in February. It is this anxiety that politicians are rushing to assuage.
The New Target: “Surveillance Pricing”
Perhaps the most significant development for retail technology vendors and data analysts is the emergence of "surveillance pricing" as a legislative target. Surveillance pricing refers to the practice of using consumer data—purchase history, location, and even biometric data—to set personalized prices or fluctuate prices in real-time based on demand. As retailers invest millions in Electronic Shelf Labels (ESLs) and AI-driven dynamic pricing models to optimize margins, lawmakers are characterizing these tools as predatory.
Leading the charge against this practice is the Stop Price Gouging in Grocery Stores Act of 2026. Introduced in the Senate on February 12 by Jeff Merkley (D-OR) and Ben Ray Luján (D-N.M.), the bill explicitly bans corporations from "leveraging new technologies" to raise grocery prices. "The bill aims to prohibit retail food stores from price gouging and engaging in surveillance-based price setting practices," the Senators stated in a press release.
In the House, Rep. Rashida Tlaib (D-MI) introduced companion legislation, H.R. 4966, which targets "personalized price gouging" where she claims stores use consumers’ sensitive personal information against them to raise prices. “The majority of Americans are stressed about rising grocery prices,” said Rep. Tlaib. “While our neighbors struggle, corporate grocery chains are feeding customer data into algorithms to decide who can be charged more. Companies should not be allowed to use electronic labeling or your personal information to charge you a higher price. We need to ban corporate price gouging and surveillance pricing.”
The Union Push
This legislative push is being bolstered by organized labor. The United Food and Commercial Workers International Union (UFCW), representing 1.2 million workers, has launched the "Affordable Groceries and Good Jobs Campaign."
According to Store Brands, this national effort seeks to ban surveillance pricing and target the growth of AI-driven technology in grocery stores. The union argues that these technologies not only harm consumers but potentially devalue retail labor. For the industry, this signals a potential alignment between consumer advocacy groups and labor unions that could create a powerful lobbying block against retail automation.
The “Affordability Agenda” in Congress
Beyond the calls for specific bans on tech-enabled pricing, a broader "Affordability Agenda" is taking shape in the House, championed by the New Democrat Coalition, a group of of 115 House Democrats “who work across the aisle and across the Capitol to advance innovative, inclusive, and forward-looking policies.”
Congresswoman Janelle Bynum (D-OR), in collaboration with the New Democrat Coalition, recently unveiled a roadmap focusing on lowering five key costs, including household essentials like groceries. Similarly, Reps. Nikki Budzinski (D-IL) and Chrissy Houlahan (D-PA) published an opinion piece outlining plans to address these "core costs crushing working Americans."
"The American people need a real plan to make life more affordable," Budzinski and Houlahan wrote, criticizing any dismissals of affordability concerns.
This rhetoric is intensifying along partisan lines. Congresswoman Susie Lee (D-NV) on February 17 released a report utilizing House Budget Committee data to argue that the current administration's economic agenda is directly responsible for higher costs. "Families in Nevada were promised lower prices. Instead, President Trump and Republicans in Congress have delivered higher grocery bills," Lee stated in a press release, pointing specifically to tariffs as a crushing weight on working families.
Arizona Senator Mark Kelly, too, pressed the administration for more action on food costs. In a February 5 statement, Sen. Kelly called on the current administration to work with Congress to lower food prices. “Arizona families cannot continue to bear the cost of rising food prices. I encourage you to take swift action and work with us to lower the price of food for American families. Thank you for your attention to this urgent matter,” Kelly said.
State-Level Actions: Bans and Tax Cuts
While Washington debates, state legislatures are moving with speed. The approaches vary wildly depending on the political makeup of the state, presenting a patchwork compliance risk for national chains.
New York: Democrats have introduced two aggressive bills. The Protecting Consumers and Jobs from Discriminatory Pricing Act specifically targets grocery stores and pharmacies, prohibiting personalized algorithmic pricing and electronic digital shelving labels. A broader bill, the One Fair Price Act, would ban most businesses from using personal data to make prices fluctuate. As reported on February 11 by News10, these bills would empower the New York Attorney General to sue companies and, crucially, allow private citizens to sue when they believe they are victims of price discrimination.
Maryland: Similar momentum is building in Annapolis. Maryland Matters reported on January 20 that HB0148, which would prohibit the use of personal or biometric data in price setting, has already begun committee hearings. The bill, backed by Maryland Governor Wes Moore, targets the "customized prices" enabled by AI, despite objections from retail advocates who argue dynamic pricing can also benefit consumers through personalized discounts.
Tennessee & Missouri: In conservative-leaning states, the legislative weapon of choice is tax relief. In Tennessee, State Rep. Mike Sparks (R-Smyrna) filed the Fresh Food Affordability Act (House Bill 2086), which would eliminate the state sales tax on fresh fruits and vegetables. In Missouri, Senate Bill 1239, sponsored by Sen. Mary Elizabeth Coleman (R-Arnold), aims to end both state and local sales tax on food and grocery items. "I am looking to increase affordability for Missourians as prices rise," Coleman told the Columbia Missourian.
The Looming Data Void
Amidst this flurry of activity, a quiet bureaucratic decision may hamper the industry's ability to understand the full scope of the crisis. The Center on Budget and Policy Priorities (CBPP) reported in February that the USDA is ending its 30-year-old annual survey on food security, beginning with the cancellation of data collection for 2025.
This comes at a time when food insecurity remains stubbornly high—affecting 47.9 million people in 18.3 million U.S. households in 2024—and as SNAP benefits face historic cuts. The CBPP warns that "the absence of this data will make it harder for policymakers, researchers, and the public to measure the harm inflicted" by rising food costs.
Implications for the Industry
For the food and beverage sector, the message is multifaceted. The "tech-forward" future of retail—dynamic pricing, facial recognition, and hyper-personalization—is colliding with a populist backlash. Retailers investing in these technologies must now price in the risk of strict regulatory prohibitions.
Simultaneously, the foundational costs of doing business are shifting. Tariffs are raising input costs, while state-level tax repeals may offer some demand-side relief. As legislative initiatives mount, the industry must prepare for a year where the price on the shelf is determined as much by the statehouse as it is by the supply chain.
Steven Hoffman is Managing Director of Compass Natural Marketing, a strategic communications and brand development agency serving the natural and organic products industry. Learn more at www.compassnatural.com.