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

Core Viewpoint - Instacart, facing scrutiny over its pricing practices, has seen its stock rebound despite a recent FTC penalty of $60 million for deceptive advertising and other issues [4][5][7]. Group 1: Pricing Practices and Investigations - A joint investigation by Consumer Reports and Groundwork Collaborative revealed that Instacart conducted pricing experiments leading to different prices for identical items, raising concerns about transparency [3][4]. - The FTC's $60 million penalty was imposed due to allegations of false advertising, failure to provide refunds, and unlawful subscription processes, which occurred shortly after the pricing investigation [4]. Group 2: Stock Performance and Market Reaction - Instacart's stock has underperformed the market this year but has increased over 31% since its year-to-date low on November 6 [5]. - Following the news of the pricing investigation, the stock initially dropped nearly 6% but quickly rebounded by the same percentage in subsequent days, indicating investor confidence [5][6]. Group 3: Customer Base and Technology Utilization - Instacart serves approximately 14.9 million customers, an increase from 14.4 million in 2024, and employs around 600,000 shoppers [6]. - The company utilizes AI for pricing tests to assess consumer price sensitivity, although these tests have drawn regulatory scrutiny [7].