Shoppers across New York may not see the same grocery prices as their neighbors — even when buying the same items at the same store.
That’s the concern driving a new inquiry into Instacart, the popular online grocery platform, after a recent study found wide price differences tied to algorithm-driven testing.
New York’s attorney general has now demanded detailed answers from the company about how those prices get set, and whether Instacart is following state law.
What triggered the scrutiny
A December study by Groundwork Collaborative and Consumer Reports put Instacart’s pricing under a microscope.
Researchers asked 437 shoppers in four cities to add the same items to their Instacart carts at the same time. Nearly three-quarters of those items showed different prices depending on the shopper.
In some cases, prices ran as much as 23 percent higher for identical products. On average, the gap between the highest and lowest price for a single item reached 13 percent.
The study estimated those differences could add up to about $1,200 a year for a typical family of four.
After the report came out, Instacart said it ended all “item price tests.” The company also said grocery stores and food brands using the platform could still test promotions and discounts.
New law puts pressure on pricing tactics
New York’s Algorithmic Pricing Disclosure Act took effect on November 10.
The law requires most companies using algorithmic pricing — sometimes called surveillance pricing — to clearly tell customers when personal data helps set their prices.
Businesses must place a disclosure near prices that reads:
“THIS PRICE WAS SET BY AN ALGORITHM USING YOUR PERSONAL DATA.”
State officials say Instacart’s current disclosures may not meet that standard. According to the attorney general’s office, the information appears buried behind fine-print links instead of sitting clearly next to product prices.
What New York wants to know
The attorney general has asked Instacart to turn over detailed information about how its pricing system works.
That includes agreements with grocery stores and food brands, the automated tools used to change prices or discounts, and how consumer data factors into those decisions.
The request also covers the specific pricing experiments flagged in the recent study and what Instacart has done to comply with New York’s disclosure law.
“Charging different prices for the exact same products leaves shoppers feeling cheated and threatens to raise costs at a time when consumers are already paying too much at the grocery store,” Attorney General Letitia James said in a statement. “New Yorkers deserve fair prices and clear disclosures about how companies are using their personal information.”
A broader push on grocery prices
This latest move fits into a broader effort by the attorney general’s office to police grocery pricing.
In November, the office issued a consumer alert warning New Yorkers about algorithmic pricing and urging businesses to follow the disclosure law. The office has also taken action against price gouging on essential goods, including eggs, baby formula, and disinfectants during the COVID-19 pandemic.
For now, Instacart has not publicly responded to the letter. The inquiry could lead to enforcement action if state officials find violations of New York law.
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