A new Walmart (WMT) pricing patent and the spread of digital price tags in thousands of stores had shoppers worried that the country’s biggest retailer was about to charge different people different prices based on what its systems knew about them.
On Sept. 25, Walmart Inc. President and CEO John Furner responded to customers in a letter. He wrote that Walmart will not raise a shopper’s price based on their income, their shopping history, how urgently they need something, or what the company thinks they can afford.
The letter arrived on the same day the Federal Trade Commission closed public comments on personalized pricing, and it draws a clear line for how Walmart plans to use artificial intelligence and store technology in the years to come.
Furner puts Walmart’s pricing promise in writing
“We price the product, not the person,” Furner wrote on Walmart’s corporate site.
He linked the promise to Every Day Low Prices, Walmart’s more than 50-year-old rule of keeping the same shelf price for everyone, no matter who is buying.
Furner gave three promises. Walmart will not use personal data to adjust prices. Sparky, the AI shopping assistant Walmart launched this year, will not be used to raise prices or hide cheaper options. Customers still choose what data they share with the assistant.
“When you engage with Sparky, that’s an invitation to serve you better, not to use your personal information to set a personalized price,” Furner wrote.
Furner also explained why Walmart uses digital shelf labels. The electronic tags, now in about 2,300 stores, keep shelf prices matched to what customers pay at checkout, and they save workers the time of changing paper tags by hand. They are not there to change prices based on the time of day or the customer standing in front of them.
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Why regulators and rival retailers are paying close attention
Federal regulators are paying close attention to this issue. The FTC had just closed public comments on a proposal that would force companies to disclose when they use personal data to set different prices for different shoppers. Consumer advocates call this surveillance pricing.
Walmart itself had faced questions this year after it won two US patents, PYMNTS reported. One was for automating online price discounts and the other for using machine learning to predict demand, though the company said neither would be used for pricing.
Some organizations still think disclosure alone is not enough to protect shoppers. Open Markets Institute, a nonprofit that studies competition in US markets, told the FTC that “transparency is not an adequate response to the power surveillance pricing gives corporations over their customers.” The group noted that dominant retailers still have significant power over shoppers who have no other store nearby.
Walmart is the country’s largest private employer and its biggest retailer. When it publicly rejects individual pricing, that message reaches every rival that watches Walmart. Grocery chains and delivery platforms now face a higher standard for how they use shopper data.
How the pledge fits Walmart’s broader business
Walmart runs big stores and Sam’s Club warehouses. It also sells products online, and rents ad space on its website and app to brands that want to reach shoppers. In its earnings report on Aug. 20, Walmart brought in revenue of $187.94 billion for the quarter, which is a 5.9% increase from a year earlier.
Online sales rose 23% globally, and membership fees increased 17%. Walmart also raised its full-year profit forecast to a range of $2.80 to $2.87 a share. WMT shares closed at $107.98 on Thursday, Sept. 24, down 4.24% year to date, though the stock is up 5.21% over the past month.
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JPMorgan analyst Christopher Horvers, who has covered retail stocks at the bank for more than 10 years and has been right on about 59% of his calls, cut his Walmart price target to $125 in August.
However, he still tells investors to buy the stock. His team said the picture is mixed, with US same-store sales up just 2.6% and health and wellness sales slowing. Even so, the average Wall Street price target of about $128 suggests there’s still room for the stock to rise.
What Walmart shoppers and WMT investors should watch next
Furner clearly said that overall Walmart prices can still change based on the costs to buy and ship. If a supplier raises prices, or if fuel costs climb, the prices at the store will also increase. Shoppers who see higher prices in the coming months are most likely seeing the effect of those cost increases.
Walmart will still tailor its ads, its Walmart+ recommendations, and Sparky’s suggestions to each shopper’s history. The price itself does not change. Two shoppers picking up the same item pay the same amount.
For WMT investors, the real growth drivers are the parts of the business that make money without changing shelf prices. Walmart Connect (its ad business), Walmart Fulfillment Services (which helps third-party sellers ship products), and Walmart+ (its paid membership program) all earn higher profit margins than groceries.
All three depend on customer trust, and the pricing promise helps to protect that trust as they keep growing.
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