Fast-food giants and supermarkets are rolling out a range of AI tools that could affect the prices shoppers pay, but experts warn the spread of data-driven tools could make personalized pricing easier to deploy.

Just this week, a federal antitrust lawsuit filed against McDonald’s

McDonald’s has denied that it’s using AI to determine what individual customers are willing to pay and said it provides its franchisees with “tools, resources, research and recommendations to help them make informed decisions.”

Even so, food businesses globally are increasingly digitizing operations with AI. Earlier this year, American grocery chain Kroger

Meanwhile, electronic shelf labels (ESLs), which display the price of items in store on digital screens, are becoming increasingly popular at supermarkets like Kroger, Amazon

The technology is also gaining traction among U.K. supermarkets such as Tesco

CNBC reached out to Amazon Fresh, Whole Foods, Tesco, Morrisons, Asda and Revolut for comment on the use of AI but didn’t immediately hear back.

As AI use becomes normalized among retailers, experts warn that this could lead to more dynamic pricing, which refers to frequent, rapid real-time changes in prices that could dramatically affect shoppers’ experiences.

“Dynamic pricing means changing prices in response to changing market conditions, such as demand, timing, capacity or competitors’ prices,” Miroslava Marinova, a senior lecturer of commercial law at the University of East London, told CNBC. “It is not new. Airlines, hotels, and ride-hailing services have used it for years.”

Bank of England economists Clare Lombardelli and Rupal Patel said in April that more sophisticated technology is leading to prices changing more frequently and also becoming more individualized, which could see more firms charging “as close to the maximum price a consumer is willing to pay for a good or service,” which they defined as “perfect price discrimination.”

These conditions could make it harder for statisticians to “measure and interpret” month-to-month inflation data, as the consumer price index is based on a representative sample of prices for shoppers.

“That works well when prices mostly move slowly and uniformly. But when prices shift continually – and differently for each shopper – the idea of a ‘representative’ price becomes strained,” the BOE economists added.

AI collects more consumer data

While dynamic pricing has been in play for a long time, the BOE economists and Marinova noted that AI tools such as ESLs and facial recognition checkout are changing the amount of information that companies can collect on consumers, from transaction histories to browsing behavior, location, and purchasing patterns.

On Wednesday, U.K. supermarket chain Sainsbury’s released “SmartLists,” an AI feature that helps customers create shopping lists and find products just by uploading pictures of what they need or by typing out meal ideas.

“This is also why the traditional distinction between dynamic and personalised pricing is becoming less clear in practice,” Marinova explained. “Dynamic pricing responds primarily to market conditions, whereas personalised pricing uses information about the consumer to estimate willingness to pay.”

As companies use both pricing systems, it raises questions around whether customer information is being used to determine the prices consumers see.

“As retailers combine market-level information with increasingly detailed consumer data, the boundary between dynamic and personalised pricing becomes thinner,” Marinova added.

Walmart and Kroger have publicly insisted in recent years that they do not use dynamic or surge pricing to set individualized prices for customers, but have instead used tools to streamline operations.

Several U.S. states are moving to curb data-driven pricing. New York requires most businesses using customers’ personal data to set prices to disclose it clearly. Maryland has restricted food retailers and delivery services from using personalised, data-driven pricing to charge higher prices for certain food, while New Jersey and Connecticut have enacted measures targeting “surveillance pricing.”

Consumer choice compromised

Dynamic and personalized pricing are not automatically bad for shoppers, Marinova said, explaining that it can discount items for some consumers, making some products and services more accessible.

However, the risk of individualized pricing is that consumers are no longer aware of whether the price they’re getting reflects general market conditions or if it’s been influenced by information about their own behavior.

“That makes it much harder to compare prices and to know whether another consumer is being offered a different price for the same product,” she said. “If consumers cannot understand why they received a particular price, cannot compare it with prices offered to others, and cannot effectively switch to another supplier, the normal disciplining effect of consumer choice becomes weaker.”

The BOE economists added that an additional challenge is that personalized pricing “splinters the consumer experience,” which means households will face increasingly different inflation rates.

“And when prices differ for the same thing, inflation becomes even more personalised – and aggregate measures may no longer reflect households’ experience,” they said.

French debt turmoil has thrust Europe’s fiscal pressures into sharp focus in recent weeks, but investors’ attention is quickly turning to Italy amid contentious new government spending plans.

The Italian government will next week present a budget encompassing recently approved allocations to defense and energy, which are set to widen the country’s deficit over the next two years and put Italy’s debt-to-GDP ratio on track to become the highest in Europe, according to analysts at Goldman Sachs.

Filippo Taddei, senior European economist at Goldman, said the changes could heap further pressure on Italian government bonds ahead of next year’s general election.

On Oct. 2, Prime Minister Giorgia Meloni’s center-right government approved an extra 28 billion euros ($31 billion) in borrowing over the next two years for defense and energy spending. Although scaled back, the spending plans have raised Italy’s 2027 deficit target to 3.4% of GDP, and its 2028 target to 3.2%. That’s up from earlier April projections of 2.8% and 2.5%, respectively, and above Goldman forecasts.

The measures — which are split evenly between defense and energy, with each worth about 0.3% of GDP per year in 2027 and 2028 — come amid rising investor jitters over runaway government borrowing across the continent.

French bond woes

Yields on French government bonds have surged to multiyear highs in recent days, as the country’s mounting debt crisis fuels wider concerns about Europe’s strained public finances.

France’s benchmark 10-year OAT

Taddei said Italy’s fiscal risk premia could rise ahead of the country’s next general election, due no later than December 22, 2027, on the back of the widening deficit.

A close-run election could leave little scope for fiscal consolidation, as parties on both the right and left look to “add spending-supportive partners” to build viable coalitions, he explained.

“Looser fiscal policy, tighter financial conditions and a close electoral race appear poised to weaken the debt outlook after four years of fiscal consolidation,” he said in a note Thursday.

‘Significant upward surprise’

Italian lawmakers voted Thursday to overhaul the country’s electoral process, switching from a hybrid model to a more proportional system. Meloni’s right-wing coalition says the change will lead to more stable governments and avoid chaotic post-election dealmaking.

But left-leaning opponents said the changes are designed to help Meloni cling to power.

Meloni’s administration — which will deliver its final pre-election budget next week — has been praised for lowering the deficit, which reached 3.1% in 2025.

Bond markets, in turn, have rewarded the country’s new-found political stability, with Meloni recently becoming the longest-serving Italian leader since the World War II.

The spending hikes comply with the EU’s National Escape Clause, which permits member states temporary budget flexibility on defense and energy investments to address shocks caused by Russia’s war in Ukraine and the Middle East conflict.

Still, Taddei said the new deficit targets are a “significant upward surprise”.

“We find that higher fiscal deficits, in addition to rising yields, look set to put the debt-to-GDP ratio on an upward path until 2028, before stabilizing around 137% — the highest in Europe by then,” Taddei noted.

“Higher yields provide a key challenge in the current environment, and we find that a structural shift to 10-year yields higher than 4% would likely set Italy’s debt-to-GDP ratio on an increasing path beyond that.”

‘Difficult fiscal decisions’

Konstantin Veit, portfolio manager at PIMCO, said the recent selloff in global bond yields has renewed the focus on countries with relatively weaker fundamentals.

Veit noted that while French government bonds are widely held by overseas investors — leaving them more exposed to negative news flow — Italian sovereign debt, in contrast, is mainly in domestic hands, which is typically “a stabilizing factor.”

“While Italy has higher debt, it has a stronger primary balance, a relatively favorable trajectory, political stability and a history of making the necessary adjustments,” Veit said.

Compared to France, Italy overall seems in a “relatively better place” at this stage, he added, with “stronger fundamentals, a more straightforward political configuration, and a track record of taking difficult fiscal decisions.”

But investors are already zeroing in on opportunities in Italian debt.

Reinout De Bock, head of European rates strategy at UBS Investment Bank, recently unveiled a short position in Italian BTPs, wagering that Italian debt could emerge as the next weak link in European sovereign debt.

“I think Italy maybe will catch up, and people will get more concerned about Italy as well at these higher yields, despite a lot of reforms that have been done in Italy,” de Bock told CNBC’s “Squawk Box Europe.”

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