Hidden markups, missed sales on Instacart leave customers feeling 'ripped off'

While many Canadian consumers likely know to expect delivery and service fees when ordering groceries on Instacart, what they may not know is they could be paying as much as $2.50 more per item in hidden markups — and some retailers say that Instacart is keeping all of it.

A Marketplace investigation into groceries being sold on Instacart from Loblaws, Costco and Walmart found that shoppers at Loblaws and Costco are paying about 10 per cent more per grocery item beyond the itemized delivery and service fees, as well as missing out on advertised in-store specials and sales.

With a valuation of $39 billion, the third-party delivery app — which allows users to hire a "shopper" to pick up their groceries at a variety of stores — has seen delivery sales grow over the pandemic.

But what's less clear is just how much consumers — some of whom live with disabilities and depend on Instacart for access to food — are paying for that convenience.

To find out, Marketplace compared the costs of purchasing identical grocery orders at each store on both the Instacart app and in-store. While the prices at Walmart were the same in store as they were on the Instacart app, Marketplace producers discovered substantial hidden markups at Costco and Loblaws.

While every Costco grocery item the team looked at was marked up, the only grocery item that didn't have a hidden markup at Loblaws were the cucumbers.

In one example, Marketplace paid $12.99 in store at Loblaws for President's Choice Blue Menu lean Italian beef meatballs; on Instacart, the price was $15.35 — a markup of $2.36.

"I'm thinking that that's 'tief.' That's the Caribbean word for being ripped off, so I'm very surprised and I feel misled," said Joanne Dominico, a mother and small-business owner who helped Marketplace with the test.

In total, Marketplace paid $74.16 more for the same order of 20 items through Instacart than when purchasing inside Loblaws; the in-store total was $ 242.49, while on Instacart the receipt for the identical items totalled $316.65.

But while $46.17 of those fees can be attributed to the company's itemized service and delivery fees, taxes and a default five per cent tip, the markups on grocery and sale items — which totalled an additional $27.40 — were not disclosed on Instacart's receipt.

In one instance, Marketplace paid $4.01 more for a block of butter that was promoted as an in-store sale at Loblaws, but cost $8 on the app.

"I could have bought a whole new chunk of butter for $4," said Dominico.

WATCH | Why was this butter $4 in store and $8 on Instacart?

Both Loblaws and Costco do not offer in-store sales and promotions on Instacart.