A recent investigation in the United States has revealed a troubling trend in retail pricing – the same product at a supermarket could have different prices for different customers, without their knowledge. As artificial intelligence (AI) continues to penetrate the retail industry, the practice of “personalized pricing” based on individual data is sparking controversy.
According to a report by the Associated Press on Sunday, more and more American retailers are utilizing AI and algorithms to assist with pricing strategies. By analyzing customers’ shopping history, locations, and browsing habits, businesses are able to tailor prices and discounts to individual consumers.
Last year, a study by Consumer Reports and other organizations found instances on the online grocery delivery platform Instacart where the same products from a single store were displayed at varying prices to different consumers. For example, a box of 18 ounces of corn flakes sold at a Safeway supermarket in Washington was priced at $2.99, $3.49, and $3.69 on Instacart, showing a 23% price difference between the highest and lowest prices.
Even eggs were not immune to this phenomenon. A dozen eggs at the same supermarket displayed prices ranging from $3.99 to $4.79 to different customers, representing about a 20% difference. Researchers estimated that if a family of four consistently encountered such price variations, their annual food expenses could differ by approximately $1,200.
Following backlash, Instacart ceased such pricing experiments, attributing the price variances to randomized testing rather than individualized pricing based on customer data, disputing the researchers’ estimates on annual expense discrepancies.
Another case involved the major U.S. retailer, Target. In 2022, California prosecutors sued the company, alleging that its mobile app displayed lower prices to customers before entering the store, only for prices to increase upon entry.
Target eventually settled for $5 million and agreed not to utilize geofencing technology to raise prices. The company clarified that such features were not based on customer data or shopping behavior.
A study released by the Federal Trade Commission (FTC) in 2025 revealed how certain tech companies used consumers’ locations, browsing histories, and shopping habits to assist businesses in developing personalized pricing and promotional schemes, with at least 250 corporate clients, including food and apparel retailers.
This trend indicates that, aside from considering factors like product costs, competitor prices, and market demand, businesses may tailor prices based on customer data in deciding what price to offer to whom. However, the extent of personalized pricing in the U.S. retail industry remains unclear.
Meanwhile, retail giants such as Walmart and Whole Foods are adopting electronic price tags to replace traditional paper labels. Electronic price tags enable remote price updates, eliminating the need for manual replacements by staff. Some consumers express concerns that supermarkets might follow the surge pricing model seen in ride-hailing services during peak demand.
Walmart’s CEO, John Furner, asserted that the use of electronic price tags aims to enhance efficiency and not adjust prices based on customer identities, weather, or different times of the day. He emphasized that the company sets prices for products rather than differentiating prices for individuals. The Associated Press also noted that the use of electronic price tags does not inherently signify the implementation of personalized pricing by retailers.
As per statistics from the National Conference of State Legislatures (NCSL), at least 30 states have considered legislation related to algorithms or personalized pricing this year. States like Maryland, New Jersey, and Connecticut have passed restrictions, some specifically targeting the grocery retail industry.
The FTC has also cautioned that companies engaging in differential pricing based on consumer data without disclosure may violate consumer protection laws.