Report Says Instacart Uses Personal Data to Alter Prices; Company Refutes Charges

The study found that nearly 75% of grocery items were offered "at multiple price points on Instacart.” Sometimes “as many as five different sales prices for the exact same grocery item, in the exact same store, at the exact same time” were offered, it said. For example, a Safeway in Washington, D.C., sold a dozen eggs at $3.99, $4.28, $4.59, $4.69, and $4.79 on Instacart, the report said.

Sometimes, “Instacart displayed an item with the same sales price but different original prices, suggesting that promotions or discounts may have been used to make a sales price look like a deep discount." Additionally, “the average difference between the lowest and highest prices [charged] was 13%,” the study added.

Totals for baskets “varied by an average of about 7% for the exact same items from the exact same locations, at the exact same time.” This could result in "a cost swing of about $1,200 per year,” based on the Instacart-offered numbers on what the average family of four spends in a year, added the study.

Researchers analyzed 193 individuals’ pricing data for the study, which was published Tuesday. It focused on four stores in Seattle; Washington, D.C.; Saint Paul, Minnesota; and North Canton, Ohio. Participants placed 18-20 grocery items into their carts for in-person pickup via Instacart. Screenshots of the prices listed were sent to researchers, along with answers to a demographics survey.

The researchers said they chose to study Instacart because, in 2022, it “underwent a fundamental change” by acquiring AI technology company Eversight. In addition, Instacart, on its website, says that its pricing tools allow companies to target offers to customers based on whether they are new or existing patrons, their proximity to a store and demographic data.

“This wealth of data has helped Instacart build an automated software program for price optimization -- or the science of analyzing customer data to determine exactly how much the company can charge,” which “most shoppers are unaware” of, the report said.

In an email to us, an Instacart spokesperson denied claims that "personal, demographic, and user-level behavioral data" are used to set online prices. "Retail partners control their prices on Instacart, and we work closely with them to align online and in-store pricing wherever possible," they said. "Each retailer’s pricing policy is displayed on their Instacart storefront, so customers always know when prices may differ from in-store and can easily compare prices across retailers before checkout."

"A subset of only 10 retail partners -- ones that already apply markups -- [test prices] online via Instacart," the spokesperson added. "These limited, short-term, and randomized tests help retail partners learn what matters most to consumers and how to keep essential items affordable," adding that "everyday essentials" like milk or bread may have slightly lower prices, while "craft beverages or specialty snacks" may have slightly higher prices as an example of this.

However, "these tests are not dynamic pricing," as "prices never change in real-time, including in response to supply and demand," nor are they "based on personal or behavioral characteristics -- they are completely randomized," the company said.

The study's authors noted that states, including Colorado (see 2504030054) and California (see 2502070017 and [Ref 2509150026:]), have introduced laws addressing surveillance pricing, and New York’s Algorithmic Pricing Disclosure Act went into effect recently (see 2510090015). But they urge “policymakers [to] intervene and require [companies] to change their practices” if this trend does not stop.