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According to a study by Consumer Reports and Groundwork Collaborative, Instacart uses AI-based pricing experiments that significantly increase the prices of identical products for different customers.
By comparing shopping carts of consumers who were instructed to purchase the same products on the platform at the same time, researchers found that the price difference could be as much as 23% in some cases.
“It’s costing families a lot of money at a time when the grocery affordability crisis is worse than it’s been in a generation,” Owens said.
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Owens said the nonprofit think tank has long studied Instacart in a number of contexts, including its acquisition of Eversight, which she said is driving these pricing experiments.
As part of the months-long investigation, Owens said the groups hosted simultaneous online shopping sessions with hundreds of volunteers shopping at some of the nation’s largest supermarkets, such as Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market and Target.
A split-screen comparison shows Wheat Thins and saltine crackers with different retail prices. (Groundwork Collaborative)
“We set up Zoom calls and asked people to use their phones to find the same 18 to 20 groceries on Instacart at the same time,” Owens said. “They added the items to their cart, took screenshots of the prices and sent them to us. We then entered the prices, analyzed the data and calculated the average differences between all tests.”
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An Instacart spokesperson did not deny the claims in the report. The spokesperson said these tests are “short-term, randomized and designed so that people see slightly lower prices and some see slightly higher prices, with the goal of helping retail partners understand consumer preferences and identify categories where they should invest in lower prices.” The company said this is only happening at some of its 10 retail partners.
A split-screen comparison shows online prices for Cheerios cereal and Alfalfa eggs. (Groundwork Collaborative)
Target said it is not affiliated with Instacart and is not responsible for prices on the Instacart platform.
Instacart also said it was testing different ways to apply these cost offsets during the period reviewed by Consumer Reports. It says price testing at the Target store has now ended.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| ACI | ALBERTSONS COS INC | 17.28 | +0.22 |
+1.29% |
| COSTS | COSTCO WHOLESALE CORP. | 884.48 | +10.07 |
+1.15% |
| TGT | TARGET CORP. | 96.97 | +2.35 |
+2.48% |
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Instacart said these experiments are similar to when retailers “test prices in their physical stores to better understand consumer preferences.”
For example, an Instacart spokesperson said a customer might see slightly lower prices for everyday essentials, such as milk or bread, but slightly higher prices for less price-sensitive products, such as craft beverages or specialty snacks.
The company reiterated that these experiments are completely random and are not based on personal or behavioral characteristics, but also on supply and demand.
People shop in a supermarket in New York City. (Spencer Platt/Getty Images)
Instacart said it will continue to work with retailers to ensure online grocery shopping is just as transparent, but Owens said consumers were unaware this testing was even happening.
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