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Instacart’s Pricing Tests Spark Backlash… But Investors Didn’t Care

Written by Jordan Chussler on December 22, 2025 

Key Takeaways

• Instacart’s AI-enabled price tests drew backlash and regulatory attention, but the company says the tests weren’t based on personal data.
• The FTC’s $60 million settlement is a significant blow to Instacart’s trust, yet it doesn’t directly alter Instacart’s core demand drivers or unit economics.
• After a brief pullback, the stock rallied to within reach of where it was before the news broke as investors shook off the news and focused on the future.

America’s favorite grocery ordering and delivery app came under pressure earlier this month after a consumer advocacy investigation raised concerns about its pricing practices and transparency.

A joint investigation conducted by Consumer Reports and Groundwork Collaborative and published on Dec. 9, found that Maplebear (NASDAQ: CART), which does business as Instacart, conducted pricing experiments that resulted in different customers seeing different prices for identical items, a practice Consumer Reports said does not meet the definition of surveillance pricing.

The scrutiny came just days before the U.S. Federal Trade Commission (FTC) announced on Dec. 18 that it was levying a $60 million penalty against the company as a result of “deceiving consumers with false advertising, failure to provide refunds and unlawful subscription enrollment processes” in an unrelated enforcement action.

This year, the stock has underperformed the market, as has much of the consumer staples sector. But since its year-to-date (YTD) low on Nov. 6, Instacart is up more than 31%. 

When the news about the Consumer Reports investigation into its pricing practices broke earlier this month, the stock pulled back nearly 6%. But in the days that followed, shares had already bounced back nearly 6%.

Here’s why investors shrugged off the controversy surrounding the company’s pricing experiments and resulting consumer backlash, and why the FTC’s penalty didn’t deflate shareholders’ long-term expectations.

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How Instacart’s Pricing Tests Created Price Differences

The largest online grocery ordering and delivery app, Instacart serves approximately 14.9 million customers—up from 14.4 million in 2024—while having amassed an army of shoppers numbering around 600,000. 

Like other companies leveraging AI for various competitive advantages, Instacart turned to the technology, using short-term, randomized A/B pricing tests to evaluate consumer price sensitivity at an aggregate level. The AI model, which it implemented as far back as 2022, was used to support short-term pricing experiments rather than real-time, demand-based dynamic pricing.

But the report found that “many U.S. shoppers who order grocery deliveries through Instacart are unknowingly part of widespread AI-enabled experiments that price identical products differently from one customer to the next.”

Those prices differed by as much as 23% per individual item from one Instacart customer to the next—a technique the company refers to as “smart rounding,” according to an inadvertently released email.  

To insiders and shareholders, however, the strategy wasn’t entirely secretive. “Instacart has disclosed its pricing experiments in corporate marketing and investor materials,” Consumer Reports found, with those documents noting that shoppers were entirely unaware that they were participating in the company’s so-called pricing experiment.

Instacart says its retail partners ultimately control base prices on the platform, while Instacart provides the infrastructure used to conduct pricing tests.

Why Investors Shrugged off the Bad News

In response to the Consumer Reports investigation, Instacart denied using surveillance pricing, stating that it does not use—and does not allow partners to use—personal, demographic, or user-level behavioral data to set prices.

But charging different prices for products based on the customers isn’t illegal, nor is it a new practice in the United States. 

While the line between dynamic pricing and surveillance pricing is blurred, companies commonly maintain practices that see price fluctuations based on demand, location and a slew of factors.  

Take, for example, rideshare operators like Uber (NYSE: UBER) and Lyft (NASDAQ: LYFT). Those companies both employ dynamic pricing—which they refer to as surge pricing—during periods of high demand. Their platforms adjust fares based on real-time supply, demand, traffic, time of day, location and even weather.

Then, there are Instacart’s financials to consider. Not only was the company profitable before its IPO on Sept. 19, 2023, but it has also averaged 10.15% revenue growth over its last four quarters. At the same time, the company’s net cash from operating activities increased by nearly 88%. 

From an earnings perspective, it’s much the same. Instacart has beat expectations in seven of the past eight quarters while only missing on revenue expectations twice during the same time frame.    

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Wall Street Remains Bullish on CART

According to industry analysis and consultancy firm Grand View Research, the global online grocery market, which was estimated to be valued at more than $67 billion in 2024, is forecast to grow at a compound annual growth rate (CAGR) of 36.8% from 2025 to 2033. 

That will bring the overall market to an expected value of more than $992 billion by the end of the forecast period. And of that, Instacart plays a central role. 

The result is a bullish case from Wall Street. The 27 analysts covering CART have given it a consensus Moderate Buy rating and an average 12-month price target that is nearly 14% higher than where shares are trading today. 

Institutional ownership sits at more than 63%, with the smart money injecting $3.73 billion in inflows into Instacart over the past 12 months compared to $1.4 billion in outflows. And despite short interest currently coming in at 6.58% of the float, or $537 million, that figure represents a nearly 29% decrease from the previous period when it was $734 million. 

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