A new investigation by Consumer Reports, in collaboration with Groundwork Collaborative and More Perfect Union, suggests that Instacart’s use of artificial intelligence in pricing experiments may have resulted in shoppers paying different amounts for the same groceries.
The findings point to a system where prices can quietly vary between users, even when orders are placed at the same retailer, at the same time, and for identical products. The study tracked over 400 Instacart users across four major U.S. cities and found that the price tag on a carton of eggs or a bag of chips often depended on who was holding the phone.
Instacart Unsplash
In the most extreme cases, the price difference for the same item hit 23 percent. This wasn’t isolated to small shops; it happened at major chains like Costco, Kroger, Safeway, Sprouts, Albertsons, and Target.
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The scale of this is massive. During the tests, roughly 74 percent of the items reviewed displayed multiple price points simultaneously. When researchers added it all up, the total cost of a shopping cart varied by about 7 percent between users. Based on Instacart’s own data on average spending, families getting hit with the “high” end of these experiments could end up paying an extra $1,200 a year.
Instacart’s Defense Instacart acknowledged the practice, confirming they run AI-assisted pricing tests with about ten retail partners. They defended the strategy as limited, short-term, and randomised – essentially digital A/B testing similar to how physical stores might test pricing. They also stressed that they don’t use demographic or personal data to decide who pays what. Since the investigation went public, the company stated they have paused these tests at certain retailers, including Target and Costco.
Shoppers, regulators question transparency and fairness
Consumer advocates are calling foul. They argue that “surveillance pricing” – where algorithms quietly shift costs behind the scenes – undermines trust. When the price of essential food items fluctuates without transparency, it becomes nearly impossible for families to budget effectively, especially with grocery inflation already high. It feels less like a discount and more like manipulation.
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Regulators are starting to pay attention. The FTC is reportedly looking closely at AI pricing tools, and several states are considering laws that would force companies to disclose when a price is set by an automated system.
For now, this is a wake-up call. Consumer Reports suggests cross-checking prices across different platforms or comparing them to in-store tags when you can. As AI becomes a standard part of retail, the pressure is on lawmakers to ensure that “dynamic pricing” doesn’t just mean “unfair pricing.”