New research from Consumer Reports in collaboration with Groundwork Collaborative and More Perfect Union suggests that Instacart’s use of artificial intelligence in pricing experiments may have caused shoppers to pay different amounts for the same groceries.
The results suggest a system in which prices can silently vary between users, even when orders are placed with the same retailer, at the same time, and for identical products. The study tracked over 400 Instacart users in four major U.S. cities and found that the price on a carton of eggs or a bag of chips often depended on who was holding the phone.
In the most extreme case, the price difference for the same item is 23 percent. This was not limited to small shops; This happened at major chains like Costco, Kroger, Safeway, Sprouts, Albertsons and Target.
AI price testing led to hidden price differences in food
The scale is enormous. During the tests, around 74 percent of the items checked showed several price ranges at the same time. When the 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 affected by the “upper” limit of these experiments could end up paying $1,200 more per year.
Instacart’s Defense Confirming the practice, Instacart confirmed that they conduct AI-powered pricing tests with approximately ten retail partners. They defended the strategy as limited, short-term and randomized – essentially digital A/B testing, similar to how physical stores might test prices. They also emphasized that they do not use demographic or personal information to decide who pays what. Since the investigation went public, the company said it has suspended these tests at certain retailers, including Target and Costco.
Buyers and regulators question transparency and fairness
Consumer advocates call this foul. They argue that “surveillance pricing” – where algorithms quietly shift costs behind the scenes – undermines trust. When prices for staple foods fluctuate without transparency, it becomes nearly impossible for families to budget effectively, especially given already high food inflation. It feels less like a discount and more like manipulation.
Regulators are starting to take notice. The FTC is reportedly closely examining AI pricing tools, and several states are considering legislation 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 comparing prices on different platforms or comparing them to in-store tags if possible. As AI becomes a standard part of retail, lawmakers are under pressure to ensure that “dynamic pricing” doesn’t just mean “unfair pricing.”
