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New customer discounts, student/senior discounts, etc. The problems arise when the nature of the reason they got a discount, or even the very fact that they did get a discount are hidden.

I'd argue even these arbitrary discounts are bad from a public policy perspective. What you're describing is a hodgepodge of marketing and PR, intended to cultivate a loyal customer base with an eye towards maximizing revenue in the future once your client list is fully captured.

The better questions to be asking are "how much resources does it make to create Product X" and "what material benefit does the client receive from consuming Product X"? A high price is justified when a product is difficult to produce and highly beneficial to consume, on the grounds that the higher price subsidizes capital investment that bring production costs down long term.

But what Instacart is doing isn't adding value to a product or pricing in cost of production. The website is instead trying to maximize the marginal profit on the purchaser. It's the AI-equivalent of you asking "How much is that product?" and the vendor replying "It costs as much money as you have in your wallet."

There's no incentive to improve efficiency or maximize throughput in this model. It is entirely a zero-sum game of taking the client for as much cash as the vendor can possibly extract per transaction.

It’s not illegal, but it’s incredibly unethical and really should be illegal.

Funny you should say that because Price Gouging laws are absolutely a thing on the books. And overcharging an individual customer relative to the median historical price is a textbook violation. The question isn't whether these actions are illegal, but whether any state AG will press criminal charges.