Coles and Woolworths enter retail’s facial recognition minefield

Australia’s two largest supermarket chains have quietly stepped into one of retail’s most contested technological frontiers. Coles and Woolworths have each tested facial recognition technology, according to reporting by The Australian Financial Review, marking a pivotal moment for an industry still grappling with the fallout from Bunnings’ own facial recognition saga.Two retailers, two careful denialsBoth companies have been quick to frame their involvement in careful, legalistic terms. Coles insists it never trialled the technology in-store, instead running a “small, controlled proof of concept” that used no customer or staff data, and stresses it has made no rollout decision. Woolworths, meanwhile, confirms it tested the technology, but only at its New Zealand office, declining to say whether an Australian deployment is under consideration. This careful wording makes sense, since no major retailer wants to be the next test case after a landmark privacy ruling.That caution is well-founded with the Bunnings saga still looming large. Australia’s Privacy Commissioner Carly Kind ruled in 2024 that the hardware giant breached privacy law by scanning hundreds of thousands of customer faces across 63 stores between 2018 and 2021 without proper consent. But this year, the Administrative Review Tribunal overturned that finding, ruling Bunnings did not break the law, while urging improvements to signage, disclosure and privacy policy. That reversal has effectively opened a legal pathway for Coles, Woolworths and others to follow, provided they get the paperwork right.Regulation catches up, slowlyThe regulatory environment has shifted to accommodate this appetite. In July, the Office of the Australian Information Commissioner (OAIC) updated its guidance for the first time since 2024, introducing a formal pathway for retailers deploying facial recognition technology, anchored by a mandatory privacy impact assessment. The Australian Retail Council has embraced this shift enthusiastically. Chief executive Chris Rodwell argues that facial recognition can help identify “known high-harm repeat offenders” before incidents occur, citing “unacceptable levels of violence, threats, intimidation and abuse” facing retail staff. A survey by the retail workers’ union, the SDA, found roughly a third of workers do not feel safe at work, a statistic increasingly used to justify surveillance as a duty-of-care imperative rather than a loss-prevention tactic.The business case beyond securityWhat distinguishes this moment from the Bunnings-era debate is scope creep. Facial recognition is no longer confined to security cameras. Verifone’s newly launched Victa biometric payment terminals will let Australian shoppers “pay with a smile” or palm, while doubling as age-verification tools and loyalty-program integrations. Verifone predicts biometric payments will become as ubiquitous as contactless cards within a decade, though it insists the payment use case remains strictly opt-in. Security-driven facial recognition, by contrast, is unlikely ever to be opt-in, since its entire value proposition depends on scanning every face that enters a store.That asymmetry matters commercially. Retailers are effectively building two parallel biometric infrastructures, one consumer-facing and consensual, one operational and largely invisible, and the public may struggle to distinguish between them. Layer in the proliferation of electronic shelf labels across Woolworths, Coles, Bunnings and Dan Murphy’s, and the anxiety sharpens further. Critics warn that pairing dynamic pricing displays with facial recognition data could enable surveillance pricing, where prices are algorithmically tailored to what a shopper is likely willing to pay, a concern that has already fuelled union campaigns against digital shelf tags in the United States.A trust deficit retailers cannot price inThe consumer backlash is already visible elsewhere in the sector. Kmart’s $89 camera-equipped smart glasses sold out within a week of their early August launch, evidence of strong demand for wearable tech, even as activist group GetUp! runs a campaign against the product that has gathered more than 53,000 signatures. The contradiction is instructive, as Australians are simultaneously buying surveillance-adjacent devices and protesting against them, a paradox retailers must now navigate carefully.For an industry still repairing trust after the Bunnings ruling, the strategic calculus is delicate. The legal ground has shifted in retailers’ favour, and the safety case is genuine and union-backed. But normalising facial recognition at scale, especially without opt-in consent, tests the limits of what shoppers will tolerate simply to buy groceries. The next eighteen months, as OAIC guidance beds in and more retailers quietly run their own “proof of concepts,” will determine whether Australia builds a retail surveillance regime shoppers grudgingly accept, or one they actively resist.