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September 24, 2025
Should Grocers Keep In-Store and Online Delivery Prices the Same?
Speaking recently at Goldman Sachs’ Communacopia & Technology Conference, Chris Rogers, Instacart’s newly-minted CEO, said the delivery platform is pushing retailers using the Instacart marketplace to price products online at the same, or just above, in-store prices in order to drive online growth.
He said that over the last 12 months, retailers employing “price parity” between online and in-store offerings have grown 10 percentage points faster than retailers employing mark-ups. Consumers shopping on price parity websites also show better retention.
Rogers, formerly Instacart’s chief business officer, noted that Ontario’s Heritage Grocers Group, the Lowe’s home improvement chain, and St. Louis-based Schnucks moved to same-as-in-store pricing earlier this year, while Pattison Food Group, a key retailer in Western Canada, recently launched on Instacart’s marketplace with in-store pricing. Walmart Canada recently reduced its markup on Instacart, while Costco’s markup was also lowered on sameday.costco.com and sameday.costco.ca.
Instacart is also labeling retailers using “in-store prices” on its marketplace.
The push toward price parity complements efforts such as the integration of loyalty programs, weekly flyers, and EBT SNAP to emphasize affordability.
“Affordability is probably the biggest unlock to online grocery adoption,” said Rogers at the Goldman conference. “We know that it’s the number one reason that people churn off of Instacart.”
Instacart’s delivery cost includes of delivery fee, service fee, and optional tips. An optional Instacart+ subscription ($9.99/month or $99/year) eliminates delivery fees on eligible orders over $10 (or $35, depending on the retailer) and reduces service fees. Instacart also offers less-expensive (Next Day, No Rush) delivery options and limited time promotional discounts.
Amazon Moves Into Deeper Competition With Instacart
The affordability emphasis comes as Amazon, in mid-August, announced it had started offering same-day delivery of perishables in more than 1,000 cities and towns across the U.S. — what some see as a threat to Instacart.
For Amazon Prime members, deliveries are free on orders over $25 and cost $2.99 for orders below that amount. Non-Prime members pay $12.99 for delivery, with no order minimum.
Asked about Amazon’s move at Goldman’s conference, Rogers said that in the three markets Amazon is piloting same-day perishable delivery, Instacart’s gross transaction value has stayed in line with its results in the rest of the U.S.
He also said Amazon is so far offering delivery windows between four to five hours — and a “few 1000 perishable SKUs” — versus the 17 million SKUs now available on Instacart. Rogers said, “We know that matters, because 70% of our customers have at least one dietary preference, and then they trust us because of our speed and our quality.”
Still, Rogers intends to use Amazon’s announcement as a “rallying cry with our retailers,” noting that many retailers reached out following the news wondering how to better compete on delivery. Rogers said, “What you’re going to see is us use this as an opportunity to get deeper, to use our technology in more ways, to help retailers compete.”
Discussion Questions
Do you see more benefits than drawbacks in retailers keeping the price of products online the same as in-store prices?
Do you see Amazon’s expansion of perishable same-day delivery as much of a threat to Instacart’s offering?
Poll
Loading …BrainTrust
Frank Margolis
Executive Director, Growth Marketing & Business Development, Toshiba Global Commerce Solutions
Scott Benedict
Founder & CEO, Benedict Enterprises LLC
Kai Clarke
CEO, President- American Retail Consultants
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Customers expect price parity, and this transparency is key to earning their trust and retaining their business. The best option for retailers is to be transparent about fees (delivery, platform, etc) at checkout, but ensure that the rest of the shopping experience is identical.
I firmly believe that online and in-store prices should always be at parity, except in rare cases where local competition requires in-store pricing to flex lower. Price consistency builds trust, simplifies messaging, and avoids customer frustration over channel differences. While there are added costs in online fulfillment, those should be recovered through service or delivery fees, not by creating confusion and undermining the value proposition of the retailer’s brand. Over time, parity strengthens loyalty and makes omnichannel strategies more seamless for both retailers and shoppers.
As for Amazon’s push into same-day perishable delivery, it certainly raises the stakes, but I don’t see it as an existential threat to Instacart just yet. Amazon’s logistics scale and Prime ecosystem are formidable, but Instacart retains a clear advantage in assortment breadth and local grocer partnerships. Many consumers want the brands, SKUs, and trust of their neighborhood grocer delivered to their door—and that’s where Instacart excels. The competitive landscape will tighten, but if Instacart continues to leverage its retailer relationships and focus on quality and personalization, it remains well-positioned alongside Amazon.
If there’s to be a delivery charge, then I say yes, parity. (And if there’s not a charge…well, there should be!) Presumably one could make theoretical arguments for differences, but the lack of transparency would quickly prove frustrating; and since when has online grocery been guided by logic, anyway?
Consumers seek value for money and desire price parity across channels. As more shoppers return to the office, they will also seek the convenience of e-grocery without being financially penalized for their patronage.
Amazon’s expansion of perishable same-day delivery will eat into rivals’ share. If Amazon’s already coming to my doorstep and now they’re bringing bananas, they will definitely get more of my money by satisfying my cross-category needs.
The costs for delivery, pickup and in-store shopping are not the same. The former two have higher costs. However, this should arguably be reflected in the price for the service, not in the price of products. Elevating prices for online is a recipe for confusion among customers.
Retailers must have the same pricing for all of their goods, whether they are online or in-store. Instacart is not a competitor to Amazon. Amazon controls its own costs, while Instacart is a 3rd party delivery system. This puts Instacart at a disadvantage no matter how you run the numbers. Amazon’s offerings and pricing will always be superior to Instacart.
“Price parity” is a tricky concept. Not that long ago, grocery retailers maintained pricing schemes for their A, B and C stores in neighborhoods with varying economic potential.
When online grocery shopping was first introduced circa 1997 there was a hue and cry about how the published prices on the web site would expose this practice.
They got over it.
These days we hear much about “personalized” pricing linked to loyalty programs, and “localized” pricing based on nearby competition. The expectation that prices will be exactly the same at every store in the chain for every shopper has at least been softened. Most shoppers don’t visit multiple stores with the same banner.
But the disparity between item prices from online grocery delivery services and those at the shelves makes shoppers anxious, it seems. For one, they see and remember the price differences on their KVIs when they visit the store (4 out of 5 transactions).
Order fulfillment and delivery are more expensive than in-store self-service, and shoppers get that somebody has to pay for that. Attempts to bury those expenses within elevated item prices come across as sneaky. Either add on the delivery charge, or offer an annual membership plan. Either way, be transparent.
I’ve seen the unhappy customers in front of me “pleading” for the in-store pricing to match what the same retailer posts online. I understand the reasons behind why retailers do this, but I don’t agree. Consider the customer’s perspective: To them, it doesn’t seem fair that the retailer offers different prices for online and in-store purchases. The inconsistency causes a lack of trust. If the retailer wants to upset customers or deter them from buying in-store and instead opt for online shopping, it should continue to charge noticeably higher prices for the in-person experience.
Price disparities between channels create “loss aversion,” where customers feel penalized rather than understanding they’re paying for additional service. Retailers clinging to online markups are optimizing for short-term margin recovery while ignoring losses in long-term customer lifetime value. Transparency always wins, eventually. As an analogy, consider the key insight of the subscription economy: customers prefer predictable, transparent pricing over variable, utility-based models. Netflix doesn’t charge more for peak viewing hours, despite its infrastructure costs fluctuating dramatically. Alternatively, consider Uber and surge pricing; the idea makes economic sense for Uber and its drivers, but customers often feel exploited when they need the service the most. The “gouging” perception creates lasting brand damage that usually outweighs the marginal revenue gains.
Price parity isn’t just about growth rates. It’s about building transparency-based sustainable competitive moats in an increasingly commoditized market.
I don’t understand the discussion. Aren’t prices, prices? Aren’t delivery costs, delivery costs?.
From a trust and transparency perspective, keeping online and in-store prices the same signals to shoppers that they aren’t being taken. Put the delivery cost on the delivery. That way shoppers can see what the supermarket is doing in an easy and transparent way. Things like this boost trust…or damage it if not done clearly.
Higher prices for online vs in-store shopping only confuses customers, and risks changing price perception of a retailers go-to-market format. Customers want to be able to shop singularly, both online and in-store with clarity and confidence.
Pizza shops figures this out years ago. Product price same. Service is an add-on. Because… service. Add for delivery. Add tip for eat in. Making the pizza is the same regardless of channel. For store picked orders, if you want someone to provide the service to pick your order in store, add for that service. Want it delivered as well, add for delivery. Product prices remain consistent.