Residents of Austin, Texas, may be facing unexpected increases in their grocery bills due to Instacart’s use of artificial intelligence (AI) for pricing. An investigation by Consumer Reports, along with nonprofit organizations Groundwork Collaborative and More Perfect Union, revealed that prices for identical grocery items can fluctuate by up to 23 percent depending on the shopper.
The report highlights a growing concern regarding algorithmic pricing, which utilizes AI to analyze extensive customer data and set real-time prices tailored to individual shoppers. This pricing method, often referred to as surveillance pricing, remains largely invisible to consumers, who generally only see the final prices presented to them.
Instacart partners with several grocery chains in Texas, including H-E-B, Aldi, Costco, Kroger, Sam’s Club, and Sprouts Farmers Market. The Texas-based H-E-B, which began offering Instacart grocery delivery services in 2015, is notably absent from the investigation’s findings. The study analyzed data from more than 400 Instacart shoppers across four U.S. cities, revealing that nearly three-quarters of grocery items had varying prices for different consumers.
Overall, the price discrepancies found in the investigation averaged around 7 percent for the same products purchased at the same time and location. According to Consumer Reports, this variation could potentially cost a family of four approximately $1,200 annually.
In light of these findings, Instacart has acknowledged the existence of AI-driven pricing experiments at ten of its partner retailers, confirming the findings of Consumer Reports. The company characterized these pricing strategies as “limited, short-term, and randomized tests,” asserting that they only minimally impact consumers and align with traditional in-store pricing practices.
Several grocery chains mentioned in the investigation, including Costco, Kroger, and Sprouts Farmers Market, operate in Texas, while H-E-B remains a popular choice for Instacart customers. Deidre Popovich, an associate professor of marketing and supply chain management at Texas Tech University, expressed concerns about the implications of AI-driven pricing for Texas consumers. She noted that shoppers relying on services like Instacart might face inconsistent prices and reduced pricing transparency.
“Consumers can no longer have consistent price expectations when AI-pricing algorithms are used,” Popovich stated. To mitigate exposure to fluctuating prices, she advised consumers to engage in comparison shopping across various grocery stores and to limit impulse purchases that might signal a willingness to pay more.
The investigation’s findings have sparked legislative action in Texas. U.S. Representative Greg Casar, a Democrat from Austin, introduced a bill in July known as the Stop AI Price Gouging and Wage Fixing Act of 2025. This legislation aims to prohibit companies from employing AI to set prices based on personal data, a practice commonly referred to as surveillance pricing. Casar emphasized the importance of safeguarding consumers from exploitative pricing practices.
“Instacart’s AI price-gouging scheme is exactly why I introduced the first bill in Congress to stop surveillance pricing,” Casar remarked. “No corporation should be allowed to use hidden algorithms to exploit working families.”
While the National Retail Federation, the largest trade association for retailers in the U.S., has not commented on Casar’s bill, it has previously contested a New York state law requiring retailers to disclose their use of algorithmic pricing. Stephanie Martz, the federation’s chief administrative officer and general counsel, argued that such regulations hinder retailers’ ability to offer consumers the best possible shopping experience.
“Algorithms are created by humans, not computers, and they are an extension of what retailers have done for decades to serve their customers better,” Martz explained. She cautioned that stigmatizing pricing tools could inadvertently lead to higher costs for consumers.
Representatives from the grocery chains mentioned in the investigation, including H-E-B, were unavailable for comment. As consumers continue to adapt to the evolving landscape of grocery shopping, the implications of AI pricing strategies remain a significant concern in Texas and beyond.
