A recent NPR Planet Money segment spotlighted Norwegian grocer REMA 1000 for its use of dynamic pricing and electronic shelf labels (ESLs) to update prices in real time. But beneath the surface of digital price tags lies a much deeper story—one that should have every retail operator, especially in loss prevention, paying attention.
REMA 1000 isn’t just updating prices faster. They’re connecting pricing, inventory management, and demand forecasting in a way that reduces waste, boosts margin, and prevents avoidable losses. In other words, they’ve found a way to turn pricing from a reactive tool into a proactive strategy to combat inventory shrink—and it’s a model that U.S. retailers would be wise to study.
The Problem: Siloed Thinking is Shrinking Profits
Many retailers still operate in disconnected silos—pricing, forecasting, promotions, and inventory planning are all managed independently. The result? Overstocked items that eventually require steep markdowns, out-of-stocks that leave revenue on the table, and missed promotional opportunities that undercut margins.
For loss prevention professionals, this disjointed planning is more than inefficient—it’s a hidden driver of shrink. Overstock leads to perishables expiring, markdowns can trigger internal theft or fraud, and poor forecasting increases reliance on emergency restocking, creating chaos at the front and back of house. Dynamic pricing, when paired with real-time inventory and demand signals, offers a way out of that trap.
The Strategy: Price Smarter, Shrink Less
REMA 1000’s approach integrates live competitor pricing, ESLs, and AI-powered forecasting to continuously adjust prices based on inventory levels and consumer demand. Items approaching spoilage are marked down earlier—before they become a loss. Scarce items are priced higher to maintain availability. Forecasts aren’t static; they flex with price and demand elasticity, allowing the grocer to plan with accuracy and agility.
This connected system isn’t just good for margin—it’s a blueprint for reducing shrink at scale. By aligning pricing with inventory realities, REMA proactively prevents spoilage, overstock, and missed sales—three of the most common sources of inventory loss in retail.
Implications for Retailers and LP Professionals
Retailers in the U.S., particularly grocers and big-box chains, are already experimenting with ESLs and AI-driven pricing—but few are integrating those tools with real-time inventory strategies. And that’s where the loss prevention opportunity lies.
Dynamic pricing can be used not only to respond to competitive pressure, but to minimize operational loss, manage stock rotation, and reduce employee-driven shrink related to markdown manipulation. However, these systems must be tightly controlled and monitored. LP teams should be embedded in conversations about dynamic pricing algorithms and guardrails to ensure pricing doesn’t become a new avenue for fraud or system exploitation.
From a legal perspective, transparency will also be critical. Consumer protection laws in several U.S. states may come into play if pricing is perceived as discriminatory or deceptive. Retailers must be prepared to defend pricing logic and maintain consistent records of how and why prices change.
Customer Sentiment: A Ticking Time Bomb?
There’s no denying it—dynamic pricing still carries a PR risk. Shoppers have grown wary of sudden price swings, particularly when they resemble surge pricing or appear to penalize demand. Surveys continue to show that while consumers want fair prices, they also demand predictability and transparency.
To maintain trust, retailers must clearly communicate the benefits of dynamic pricing—such as reducing food waste, ensuring stock availability, and supporting sustainability goals. That messaging is not just a job for marketing—it’s a compliance and reputational issue that intersects with legal and LP risk.
The Future of Retail Planning: Connected and Constant
The path forward is clear: pricing, inventory, forecasting, and shrink management can no longer live in separate silos. The future lies in intelligent systems—whether AI agents or cross-functional planning models—that make pricing decisions based on inventory realities, and vice versa.
For loss prevention professionals, this shift is an invitation to expand your influence. Shrink isn’t just a store-level issue anymore—it’s baked into the supply chain, planning cycle, and pricing strategy. Understanding how dynamic pricing and inventory systems interact may be one of the most powerful new tools in the LP toolbox.
As retailers look for new ways to protect margin, reduce waste, and outpace competitors, REMA 1000’s integrated model offers one simple takeaway: when price and inventory decisions are made together, everybody wins—especially the bottom line.
References:
NPR. (2024, March). Is dynamic pricing coming to a supermarket near you? Planet Money. https://www.npr.org/sections/money/2024/03/xx/dynamic-pricing-supermarkets
Planet Money. (2024). Is dynamic pricing coming to a supermarket near you? [Audio podcast episode]. In NPR. https://www.npr.org/2024/03/xx/planet-money-dynamic-pricing