Grocery delivery service Instacart uses artificial intelligence to experiment with prices and charge some shoppers more than others for the same items. new research found.
A study by nonprofits Groundwork Collaborative and Consumer Reports of more than 400 shoppers in four cities found that Instacart sometimes offered up to five different prices on the same item at the same store on the same day.
The average difference between the highest and lowest prices for the same item was 13%, but some study participants saw prices that were 23% higher than those offered to other shoppers.
Different prices are unfair to consumers and make it worse for grocery stores. accessibility crisis It's a problem that everyday Americans are already grappling with, says Lindsey Owens, executive director of Groundwork Collaborative.
“In my opinion, Instagram the laboratory should be closed,” Owens said. “American grocery shoppers are not guinea pigs, and they should be able to expect a fair price when they shop.”
The study found that an individual Instacart shopper could theoretically spend $1,200 more per year on groceries if they had to deal with the price differences observed in the pricing experiments.
The study found that at a Safeway supermarket in Washington, D.C., a dozen Alfalfa eggs were selling on Instacart for $3.99, $4.28, $4.59, $4.69 and $4.79, depending on the buyer.
At a Safeway store in Seattle, a box of 10 Clif Chocolate Chip Energy bars was sold on Instacart for $19.43, $19.99 and $21.99.
Instacart likely began experimenting with pricing in 2022 when the platform acquired artificial intelligence company Eversight. Instacart now advertises Eversight Pricing Software to its retail partners, arguing that price experimentation is insignificant to consumers but can increase store revenue by up to 3%.
“These limited, short-term, and randomized tests help retail partners learn what matters most to consumers and how to keep essentials available,” an Instacart spokesperson said in a statement to The Times. “Tests are never based on personal or behavioral characteristics.”
Instacart said the price changes are not a result of dynamic pricingsimilar to that used for airline tickets and passenger bookings because prices never change in real time.
But a Groundwork Collaborative study found that nearly three-quarters of grocery items purchased at the same time and from the same store had different prices.
AI software helps Instacart and grocers “determine exactly what you're willing to pay, which will give them a much higher profit and a much higher annual grocery bill for you,” Owens said.
The study focused on 437 in-store and online shoppers in North Canton, Ohio; St. Paul, Minnesota; Washington, DC and Seattle.
Instacart shares fell more than 5% in afternoon trading Wednesday and are up 1% this year.
