Instacart Addresses Allegations of Price Discrepancies Among Customers

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Instacart, the grocery delivery service headquartered in San Francisco, is addressing claims that it has been charging different prices to different customers for the same products. These allegations have arisen from findings suggesting that the company conducted an experiment using artificial intelligence to adjust prices.

The claims come from a study by Consumer Reports, along with the advocacy group Groundwork Collaborative and the non-profit news outlet More Perfect Union. According to their research, Instacart’s app presented varied pricing for identical items to different customers, with some prices reportedly differing by as much as 23%.

In a summary of the study, Groundwork Collaborative accused Instacart and similar companies of “developing, acquiring, and refining technology to conduct pricing experiments on a large scale.”

Consumer Reports revealed that Instacart’s pricing strategy involved AI algorithms that tailored grocery prices for individual consumers. This AI-driven pricing model was reportedly tested in collaboration with major grocery retailers such as Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market, and Target.

Data for the report was collected through an experiment involving 437 shoppers in live tests across four cities, Groundwork Collective said. Researchers helped shoppers simultaneously add items from a specific store to their Instacart carts, without making the purchases.

Researchers then measured the prices displayed to each shopper and how those prices varied from one to the next. The report determined that there was an average of about a 7% difference in basket totals, which could translate into an annual cost “swing” of about $1,200.

Calling the price differences “negligible,” Instacart has hit back at the allegations while stopping short of denying the reports’ findings outright.

In a company blog post published after the reports came out, Instacart admitted to facilitating randomized “online pricing tests” with a “subset” of 10 retail partners. The company suggested that the tests were part of its plan to “[double down] on affordability” and “make services like Instacart accessible to more consumers.”

“These short-term, randomized tests help retail partners understand category-level price sensitivity so they can sustainably invest in lower prices where consumers care most,” the company wrote, in part. “For example, as a result of these tests, some consumers may see slightly lower prices on essentials like milk or bread, and slightly higher prices on items like specialty snacks or craft beverages.”

Instacart also claimed that during testing, “prices never change in real-time, including in response to supply and demand.” The company likened its testing to pricing experiments that a grocery retailer might conduct in-store.

“The tests are never based on personal or behavioral characteristics — they are completely randomized,” a spokesperson for Instacart told Nexstar.

Nexstar’s Michael Bartiromo contributed to this report.