Does your online grocery order ever feel fishy, like the prices just aren’t adding up? It turns out you’re right to be suspicious — and now we have compelling evidence.
New research by a consortium of groups including Groundwork Collaborative, Consumer Reports, and More Perfect Union have found evidence of a massive experiment being run on consumers by grocery delivery company Instacart.
The researchers’ experiments found evidence that Instacart — which calls itself “the largest online grocery marketplace in North America” — has been charging some customers up to 23 percent more than others for the same product at the same location.
To gather the info, the three groups compiled data from 437 Instacart shoppers browsing stores in several American cities. All together, the price for the exact same item fluctuated by an average of seven percent at the exact same location at the exact same time.
At Safeway stores in Seattle, the same cart of groceries cost some shoppers as much as $123.93, while others paid $114.34 or $119.85. When looking into a Target in Minnesota, researchers found that Instacart split customers into seven distinct “price groups,” varying from $81.24 at the lowest to $86.78 at the highest for the exact same groceries.
While the cost only varied by a few dollars in the best-case scenarios, the algorithm-tax can add up fast.
“A household of four will spend roughly an extra $1,200 per year for groceries on Instacart if they are exposed to the average fluctuations in total basket prices observed in this study,” the researchers wrote.
The whole thing kicked off in 2022, when Instacart acquired an AI company called Eversight. That acquisition, the researchers noted, allowed Instacart to begin “experimenting with prices,” using dynamic algorithms to increase profits from each sale by two to five percent.
In a 2024 call with investors and analysts, Instacart’s CEO said that AI pricing algorithms are helping the company “really figure out which categories of products our costumers [are] more price sensitive on,” and to set prices “based on that information.”
Alarmingly, the companies whose stores were involved in the scheme told the researchers they had no idea the tests were being run. Target, for example, said it has no relationship with Instacart, adding that it “does not directly share any pricing information with Instacart or dictate what Instacart prices appear on their platform.”
In its defense, Instacart told the consortium that it scrapes Target’s prices and charges an additional amount to cover its “operating and technology costs.” However, the company claims price fluctuations were just a test to see how much extra they need to charge, and that “tests have now ended.”
Though that particular research mostly covered online shoppers, companies like Walmart, Kroger, and Whole Foods have moved to implement dynamic pricing for in-store shoppers as well. Kroger, for example, has been experimenting with these systems since 2018, according to Forbes, and has since rolled it out to hundreds of brick and mortar locations.
It all reinforces previous research which shows that the largest driver of inflation by far is corporate profits. With new dynamic pricing algorithms that can alter the cost of airline tickets, insurance coverage and now groceries, those profits are soaring to all new heights.
More on algorithms: Researchers Concerned to Find That Five-Year-Olds Are Already Deeply Hooked on Brain Rot Content