It has happened to all of us. You pass your favorite low-price gas station on the commute home. You check the gas price, check the gas gauge, and decide you can go one more day without a fill up. On your way to work the next morning; drat! The gas price has increased 13 cents per gallon in response to some global crisis on oil demand.
2008 saw dramatic increases in world food prices owing to increased demand for biofuel feedstock material (see “Fuel, Food, Security - Pick Two“). However, while grocery process may have been increasing week to week, an ear of corn generally cost the same when a customer started shopping as when he checked out.
What if grocery store food prices, like gasoline prices, and especially electricity prices could fluctuate in real time as market supply and demand changed? A technology that may have the potential to link food prices to commodity spot prices is on full display at Whole Foods Market in Texas.
When I first saw these nodes, part of the Whole Foods digital pricing system, I assumed they were labor-saving devices to eliminate need to change product prices manually. However, I found a blog posting on-line by Jon Ray entitled “Whole Foods is Watching You!” that suggests a more sophisticated motive to deploy this technology.
Based on his observation that these digital pricing nodes changed as he shopped the Whole Foods in Austin, Mr. Ray speculates that the supermarket might be adjusting the price of products in real time. The post goes on to objectively outline pros and cons of this technology, concluding that if used correctly these nodes could benefit consumers while promoting advantageous shopping patterns in stores.
Someday soon, we might find ourselves charging our plug-in hybrid cars late at night to pay off-peak electricity rates while shopping early on Wednesday mornings to pay off-peak banana rates.