A recent investigation by Consumer Reports and Groundwork Collaborative has revealed that Instacart is conducting AI-enabled pricing experiments that can vary the cost of groceries for different customers by up to 23 percent. The findings, which emerged from an analysis conducted over several months in 2025 across U.S. grocery retailers, indicate a practice with significant financial implications for families nationwide.
The investigation identified that Instacart’s algorithmic pricing strategies apply to major retail partners including Albertsons, Costco, Kroger, Safeway, Sprouts Farmers Market, and Target. While the company confirms these experiments exist, it asserts they affect only a small portion of its retail partners.
Despite Instacart’s claims that such price variations are minimal and negligible, the research suggests potential annual cost increases of approximately $1,200 for a typical family of four. This comes amid the fastest rise in food prices since the late 1970s.
Instacart has marketed its pricing experiments as “smart rounding,” aiming to optimize sales through algorithmic pricing. However, experts warn that such practices could lead to “surveillance pricing”—a system where personal data influences individualized costs for essential goods. This approach raises critical concerns about consumer privacy and fairness in the grocery market.
The report notes that while economic data from producers shows grocery prices have been falling since early 2025, consumers may still face higher costs due to retailer policies. Instacart’s technology is said to increase grocery store sales by one to three percent and boost profit margins per transaction by two to five percent.
Critically, algorithmic pricing operates without consumer awareness. Individuals are unaware that their grocery bills are manipulated based on AI analysis of their shopping behavior. Although charging differing prices for the same item is not inherently illegal, the use of such practices raises significant questions about consumer protection and ethical standards in retail.
