AI Could Revolutionize Pricing, Raising Concerns Over Fairness

POLICY WIRE — Washington, D.C. — Artificial intelligence is poised to transform how retailers set prices, raising concerns about fairness and transparency in consumer markets.

The traditional price tag, a long-standing symbol of uniformity in retail, may soon be replaced by algorithms that tailor costs to individual shoppers based on their personal data, according to industry experts.

Lindsay Owens, CEO of Groundwork Collaborative, a nonprofit focused on economic policy, warns that AI could disrupt the fixed pricing model that has existed since the 1860s, when John Wanamaker introduced standardized pricing in his Philadelphia store. With AI, companies can now analyze vast amounts of consumer data to determine what each person is willing to pay, leading to more personalized and dynamic pricing strategies.

Cornerstone Research, an economic consulting firm, noted in a 2025 report that AI enables firms to collect and process massive datasets, allowing for more granular and individualized pricing than ever before. This shift could lead to situations where consumers face different prices for the same product, depending on factors such as location, browsing history, or even family structure.

A December investigation by Groundwork Collaborative and Consumer Reports revealed that Instacart, a grocery-shopping platform, tested AI-driven pricing that showed different prices for identical items to different customers. The pilot, which followed Instacart’s 2022 acquisition of Eversight, found that some shoppers paid up to 23% more for the same goods. This could result in an annual difference of around $1,200 for a family of four.

In response, Instacart announced it would stop using AI to charge different prices for identical items on its platform. However, Owens said other companies are also experimenting with similar methods, using data like online behavior, income level, and ZIP code to set personalized prices.

Groundwork’s recent research also highlighted Walmart’s patent applications for technology that could create detailed shopper profiles and adjust prices accordingly. One patent suggests that if a customer buys tuna, they might receive a different price for mayonnaise. Walmart denies using customer data for individualized pricing, stating it does not alter prices based on shopping history, urgency, or willingness to pay.

Experts like Jay Zagorsky, a senior lecturer at Boston University, caution that AI-driven personalized pricing could become widespread, but businesses are unlikely to disclose such practices due to potential consumer backlash.

Reporting by Policy-Wire (PW)