Instacart has announced the suspension of its price testing practices on its grocery delivery platform, effective immediately. This decision follows a report published on December 9, 2023, by Consumer Reports in collaboration with advocacy groups Groundwork Collaborative and More Perfect Union. The investigation revealed significant concerns regarding the pricing strategies employed by the company.
The blog post released on December 22, 2023, indicated that while some media coverage may have included misconceptions about its pricing, Instacart acknowledged that it did not meet customer expectations. “We’ve listened carefully to feedback from our customers,” the company stated. “We understand that the tests we ran with a small number of retail partners that resulted in different prices for the same item at the same store missed the mark for some customers.”
Instacart’s price testing involved presenting varying prices for identical products, depending on the shopper’s situation. This practice raised concerns among consumers, especially during a time when many families are striving to maximize their grocery budgets. The company emphasized that, moving forward, customers shopping on the platform will see uniform pricing for identical items. “Now, if two families are shopping for the same items, at the same time, from the same store location on Instacart, they see the same prices—period,” the blog post explained.
While retailers using Instacart can still set their own prices and vary them by store location, the cessation of price testing means that customers will no longer encounter discrepancies for the same items. The Consumer Reports study involved 437 shoppers across four cities, highlighting how different pricing could affect customer trust.
Although the practice of varying consumer prices is not illegal, Consumer Reports warned about the potential for “surveillance pricing,” which could exploit consumer data to manipulate prices. In response to these concerns, Instacart stated that their pricing strategies do not fall under this category.
The announcement to halt price testing comes shortly after Instacart agreed to a settlement of $60 million with the Federal Trade Commission (FTC). This settlement was related to allegations of false advertising practices, which the company has denied, asserting that the foundation of the FTC’s inquiry was “fundamentally flawed.”
Instacart’s recent decisions illustrate the growing scrutiny companies face regarding pricing transparency and fairness in the digital marketplace. As the grocery delivery sector continues to evolve, maintaining consumer trust will be paramount for companies like Instacart.
