Forget Milk and Eggs: Supermarkets Are Having a Fire Sale on Data About You

When you use supermarket discount cards, you are sharing much more than what is in your cart. From a report: When you hit the checkout line at your local supermarket and give the cashier your phone number or loyalty card, you are handing over a valuable treasure trove of data that may not be limited to the items in your shopping cart. Many grocers systematically infer information about you from your purchases and "enrich" the personal information you provide with additional data from third-party brokers, potentially including your race, ethnicity, age, finances, employment, and online activities. Some of them even track your precise movements in stores. They then analyze all this data about you and sell it to consumer brands eager to use it to precisely target you with advertising and otherwise improve their sales efforts. Leveraging customer data this way has become a crucial growth area for top supermarket chain Kroger and other retailers over the past few years, offering much higher margins than milk and eggs. And Kroger may be about to get millions of households bigger. In October 2022, Kroger and another top supermarket chain, Albertsons, announced plans for a $24.6 billion merger that would combine the top two supermarket chains in the U.S., creating stiff competition for Walmart, the overall top seller of groceries. U.S. regulators and members of Congress are scrutinizing the deal, including by examining its potential to erode privacy: Kroger has carefully grown two "alternative profit business" units that monetize customer information, expected by Kroger to yield more than $1 billion in "profits opportunity." Folding Albertsons into Kroger will potentially add tens of millions of additional households to this data pool, netting half the households in America as customers. While Kroger is certainly not the only large retailer collecting and monetizing shopper data through the use of loyalty programs, the company's evolution from a traditional grocery business to a digitally sophisticated retailer with its own data science unit sets it apart from its larger competitors like Walmart, which also collects, analyzes and monetizes shopper data for brands and for targeted advertising on its own retail ad network.

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