Price Pandemonium
Instacart's AI-powered pricing may inflate grocery bills in Texas
Instacart is "testing" an algorithm that means shoppers are paying different amounts for the same goods at the same time.
Houstonians who order groceries through the Instacart delivery service may find that their grocery bills contain an unwanted surprise.
An investigation conducted by Consumer Reports and two nonprofits, Groundwork Collaborative and More Perfect Union, found that AI-enabled experiments performed by Instacart resulted in prices on identical grocery products fluctuating as much as 23 percent from one shopper to another.
“Algorithmic pricing is usually invisible to consumers, who typically see only the prices and fees they’re offered,” Consumer Reports says.
Algorithmic pricing, also known as surveillance pricing, relies on AI and software to crunch mounds of customers’ personal data and set real-time prices tailored to each shopper.
In Texas, Instacart’s grocery partners include H-E-B, Aldi, Costco, Kroger, Sam’s Club, and Sprouts Farmers Market. San Antonio-based H-E-B, the dominant grocery chain in Texas, launched Instacart grocery deliveries in Texas in 2015, with Austin and Houston being the first two markets.
The investigation analyzed data from more than 400 Instacart shoppers in four U.S. cities, none of which is in Texas. Nearly three-fourths of grocery items featured in the Instacart investigation offered different prices to different shoppers.
Overall, the Instacart grocery bills examined by researchers varied by an average of seven percent for the same items purchased from the same locations at precisely the same times. The average price variations revealed by the study could cost a four-member household about $1,200 per year, Consumer Reports says.
In response to the investigation, Instacart confirms Consumer Reports and Groundwork Collaborative’s findings and acknowledges AI-driven pricing experiments were underway at 10 of Instacart’s grocery partners at the time of the investigation. Instacart tells Consumer Reports that the experiments, which it calls “limited, short-term, and randomized tests,” affect only a small number of its retail partners, have a limited effect on consumers’ wallets, and are aligned with in-store pricing practices.
Four of the grocers cited in the Instacart investigation operate in Texas: Costco, Kroger, Sprouts Farmers Market, and Target. Although H-E-B is a common place to see Instacart shoppers, it isn't mentioned.
Deidre Popovich, associate professor of marketing and supply chain management at Texas Tech University, says the many Texas shoppers who rely on Instacart and other grocery-focused companies that embrace AI pricing might wind up paying higher prices and facing less pricing transparency.
“Consumers can no longer have consistent price expectations when AI-pricing algorithms are used,” Popovich tells CultureMap.
Popovich says consumers can reduce their exposure to AI-influenced grocery prices by doing comparison shopping — through brands’ apps and other means — at several retailers, such as H-E-B, Costco, and Sam’s Club. Furthermore, she advises shopping for groceries at consistent times and limiting “impulse add-ons” that signal to retailers a willingness to pay higher prices.
The issue raised by the investigation has a strong tie to Texas regardless of which chains are involved.
U.S. Rep. Greg Casar, an Austin Democrat, introduced legislation in July that would ban companies from using AI to set prices based on personal data, a practice called “surveillance pricing.” The bill is known as the Stop AI Price Gouging and Wage Fixing Act of 2025.
“Instacart’s AI price-gouging scheme is exactly why I introduced the first bill in Congress to stop surveillance pricing,” Casar says in a statement provided to CultureMap. “No corporation should be allowed to use hidden algorithms to exploit working families, and I’m fighting to make sure Texans are protected from this kind of abuse.”
The National Retail Federation, the country’s largest trade group for retailers, hasn’t commented on Casar’s bill. However, the group unsuccessfully tried in federal court to block a new state law in New York that requires retailers to disclose whether they use algorithmic pricing.
Stephanie Martz, the retail group’s chief administrative officer and general counsel, says in a news release that the New York law interferes with the ability of retailers to provide customers “with the highest value and best shopping experience they can.”
“Algorithms are created by humans, not computers, and they are an extension of what retailers have done for decades, if not centuries, to use what they know about their customers to serve them better. It’s just done at the scale of the modern economy,” Martz adds. “Stigmatizing tools that drive prices down turns offering deals into a liability, and consumers will end up paying more."
Representatives of the grocers named in the Instacart investigation couldn’t be reached for comment. A representative of H-E-B also couldn’t be reached for comment.
