Instacart is taking dynamic pricing to new levels

A new study from Consumer Reports and Groundwork Collaborative shows that the digital shopping platform Instacart is testing an algorithmic pricing model that could cost shoppers an extra $1,200 a year. Additionally, Instacart consumers reportedly weren’t aware that prices were changing or that they varied by customer.

The study asked shopping volunteers to review prices on 20 items at major grocers like Costco, Albertsons, Safeway, Target, and Kroger across four major U.S. cities. The result showed 75% of items changed price at an average upsell of 23% with Instacart.

The app is dubbed “by far the dominant e-commerce grocery delivery platform in the U.S., with nearly 250 million orders fulfilled in the first three quarters of 2025.”

Different prices for different customers

In the testing exercise, 39 study participants leveraged Instacart to shop at a Seattle-based Safeway in early September. According to the study, each shopper stashed 20 products in their digital basket and took a snapshot of product prices.

When analysts studied the results, they discovered five different prices for some products. For example, the same Oscar Mayer Deli Turkey: $3.99, $4.31, $4.59, $4.69, and $4.89, representing 23% between the lowest and highest product markup.

Using the same testing model at a Washington, D.C. Safeway, researchers found a dozen Lucerne eggs listed at five different prices: $3.99, $4.28, $4.59, $4.69, and $4.79.

Ultimately, study analysts found that Instacart basket totals varied by about 7% for the same items from the exact locations, at the same time.

“Instacart is quietly running pricing experiments on millions of shoppers during the worst grocery affordability crisis in a generation, and it’s costing households as much as $1200 a year,” said Lindsey Owens, executive director at Groundwork Collaborative. “They have turned the simple act of buying groceries into a high-tech game of pricing roulette.”

When the same box of Wheat Thins can jump 23% in price because of an algorithm, “that’s not innovation or convenience, it’s unfair,” Owens notes. “It’s time for Instacart to close the lab. Americans shopping for groceries aren’t guinea pigs and shouldn’t have to pay an Instacart tax.”

For its part, Instacart said it's conducting experiments at 10 unknown grocery chains, with testing impacting a small number of shoppers.

“Just as retailers have long tested prices in their physical stores to understand better consumer preferences, a subset of only 10 retail partners — ones that already apply markups — do the same online via Instacart,” the company said in a statement. “These limited, short-term, and randomized tests help retail partners learn what matters most to consumers and how to keep essential items affordable.”

Retail experts weigh in

In seeding different grocery prices, Instacart is playing a dangerous game with already budget-strapped consumers, retail specialists say.

"Instacart’s ‘smart rounding’ experiment is a high-stakes gamble with consumer trust. In an economy where inflation has made every dollar count, today’s shopper is more value-focused than ever,” said Mike Herrick, chief technology officer at Airship, a Tampa, Fla.-based mobile-first consumer experience services firm.

Herrick noted Instacart isn’t just comparing products; it’s auditing the retailers themselves. “When up to a third of consumers are ready to switch brands over a single bad interaction or price discrepancy, treating pricing as an opaque ‘black box’ experiment is incredibly dangerous,” he stated.

Dynamic pricing, also known as ‘smart rounding’ pricing models, has become a controversial topic in both the retail and consumer advocacy realms, and now with Instacart’s motives in question.

“This looks less like optimization and more like experimentation,” said Natalia Glushchenko, revenue growth management director at New York City-based Vibrant Ingredients. “When 75% of items change price with an average 23% upsell, shoppers don't see 'smart rounding', but they will see inconsistency, and that will lead to erosion of trust.”

Glushchenko noted AI-driven pricing can “absolutely improve” availability, reduce waste, and match demand patterns, but consumer and retailer risks abound. “The moment the customer feels they are being 'tested on, ' it becomes a brand-risk, not a value-add,” she said. “That’s especially so in grocery stores, where trust is the most important.”

Pricing power plays don’t help shoppers

Other retail experts say Instacart’s use of smart rounding shows how AI-driven pricing is shifting power away from consumers.

"Instacart’s use of smart rounding shows how AI-driven pricing is shifting power away from consumers,” said Andrew Gamino-Cheong, chief technology officer and co-founder of AI governance company Trustible. “The biggest concern is that shoppers weren’t told they were part of a live pricing test that could raise their grocery bills. This fits a broader trend in e-commerce where algorithms quietly test how far prices can be pushed before people notice or stop buying.”

Additionally, smart rounding testing could lead to more harmful consumer outcomes.

“If pricing models use location or buying history to infer traits about shoppers, certain groups could be charged more without realizing it,” Gamino-Cheong noted. “We’ve already seen similar patterns in housing, credit, and insurance, and groceries could be next.”

The big picture shows that while AI-powered pricing experiments may boost revenue, they weaken consumer trust at a time when affordability is already a significant concern. “Without safeguards, this type of pricing will likely become a larger political issue in the years ahead,” Gamino-Cheong added.