A new Consumer Reports investigation indicates that the price you pay for grocery delivery through Instacart may differ from what your neighbor pays for the same items.
According to Consumer Reports and 437 volunteer shoppers, prices on grocery items from major chains could vary by up to 23 percent depending on the customer. These differences could mean some shoppers pay between 7 cents and $2.56 more per item than others.
At issue is the potential for retailers to adopt “surveillance pricing,” which would use personal data to set individualized prices. Instacart, however, told Scripps News, “These tests are not dynamic pricing—prices never change in real time, including in response to supply and demand. The tests are never based on personal or behavioral characteristics—they are completely randomized.”
Consumer Reports expressed concern that with the growth of artificial intelligence and large-scale data collection, future pricing could be tied to an individual buyer’s habits, rather than time, location or other factors Instacart says drive pricing changes.
“All of us, without our knowledge, are being conscripted in this enormous and growing social experiment being conducted by companies across a wide range of industries,” said Len Sherman, adjunct professor and executive-in-residence at Columbia Business School. “Everything we’ve ever done as a consumer could factor into the price we see next time.”
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One example from Consumer Reports showed that 39 customers buying identical groceries from a Seattle Safeway were charged between $114.34 and $123.93.
While some products showed no difference in price, others varied by more than 23 percent.
Based on how much Instacart says the typical household of four spends on groceries, Consumer Reports estimated the average price variations observed could translate to a cost swing of about $1,200 per year.
In 2022, Instacart began using Eversight, a platform for “continuous revenue optimization.” Instacart says its pricing tests are short-term and randomized—some shoppers may see slightly lower prices and others slightly higher—helping retail partners understand preferences and identify categories where they should invest in lower prices.
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The company added that it uses “a machine learning-driven tool that helps retailers improve price perception and drive incremental sales for dozens of early-adopting retailers leveraging the product.” This tool has reportedly generated millions of dollars in additional revenue for partner stores.
Instacart maintains the price differences are “negligible.”
