Convenience Comes at a Price
Instacart is one of the quickest-growing services in North America. The app, which allows users to order from their favorite stores from the comfort of their homes, has seen a boom since the COVID-19 pandemic.
Source: Michael Loccisano/Getty Images
While users of Instacart know the price of their weekly groceries will rise due to delivery and service fees, some were unaware that they could be paying as much as $2.50 more per item.
Marketplace Investigation
A recent Marketplace investigation into groceries sold through Instacart from Walmart, Costco, and Loblaws has revealed that customers are paying as much as 10% more per item.
Source: Michael Loccisano/Getty Images
The extra charge on groceries and the service fees and missing out on in-store specials means customers are paying significantly more for their weekly grocery haul.
What Is Unclear About the Service
Users of Instacart have admitted they don’t mind paying a little extra for the convenience.
Source: Smith Collection Gado/Getty Images
However, according to the study, it’s unclear how much extra consumers pay. Critics of the app suggest that Instacart may be taking advantage of people with disabilities who depend on the app for access to food.
The Truth Behind the Mark-Up
To get to the bottom of the mystery, Marketplace compared the prices of several popular items on the Instacart app and in-store. The results were shocking.
Source: Michael Loccisano/Getty Images
While prices at Walmart appeared to be the same in-store as on the app, markups were observed if people shopped at Costco and Loblaws.
Everything Marked Up at Costco
The team at Marketplace was surprised to see that everything at Costco was marked up on the Instacart app.
Source: Eric Thayer/Getty Images
Whereas only a few items, including cucumbers, were marked up at Loblaws. In one instance, Marketplace paid $12.99 in-store for Italian meatballs. Yet, on Instacart, the same product was $15.35 — a markup of over $2.00.
Shocking Revelation
Marketplace decided to order 20 everyday items from Loblaws on Instacart and then purchase the same items in-store.
Source: Justin Sullivan/Getty Images
The in-store total was $242.49, whereas the Instacart total for the same items was $316.65. When compared, there is a total difference of $74.16.
Customers Opinions
Joanne Dominico, a mother, and small business owner, was part of Marketplace’s study. She went on to give her opinion on the findings.
Source: Michael Loccisano/Getty Images
“I’m thinking that that’s ‘thief.’ That’s the Caribbean word for being ripped off, so I’m very surprised, and I feel misled,” said Joanne Dominico.
Double the Price
During the investigation, the Marketplace team was shocked to find that some in-store items were almost twice the price on Instacart.
Source: Jill Ferry/Getty Images
In one instance, they paid $8.00 for a block of butter. Yet, in-store, the same product was only $3.99.
Why the Increase in Price?
Marketplace emailed both Costco and Loblaws to question why such a dramatic price increase was observed when customers used the Instacart app.
Source: Justin Sullivan/Getty Images
Both grocery stores replied with similar answers. They claim Instacart keeps all of the profits from price differences, in addition to the service and delivery fees.
Instacart Refuses to Comment
When the Marketplace investigators reached out to Instacart, they confirmed that retailers were responsible for setting their own prices.
Source: Mario Tama/Getty Images
However, they did not respond when questioned about who receives the money from the markups.
We Notify the Customer
A spokesperson for Instacart would later claim they inform all of their customers when the prices on the app exceed those in-store.
Source: Scott Olson/Getty Images
They said, “Where there are item markups by a particular retailer, we notify customers that prices vary relative to store prices so they can make clear and informed purchasing decisions.”
Source: Business Insider India