E-Commerce

Online inflation slows in May, but persists on an annual basis: Adobe

Groceries have overtaken apparel as the top category for rising prices, according to the Adobe Digital Price Index.
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Francis Scialabba

· less than 3 min read

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.

We still have to wait a day for the latest CPI numbers to drop, but we do have some insight into online inflation in May. According to Adobe’s Digital Price Index, released today, online inflation fell 0.7% from April, decreasing for the second straight month—but consumers are still paying more for most products compared to last year.

  • Prices for electronics and apparel, which made up a third of online spend in 2021, fell 1.4% and 1.5%, respectively, on a month-over-month basis.
  • Looking at the categories YoY, apparel is up 9%, while electronics, among the outliers, are actually down 6.5%.

Food for thought: Grocery prices continue to surge on a month-to-month (1.3%) and a YoY (11.7%) basis, according to the report. In fact, May’s 11.7% increase sets a new record high—and it overtook apparel as the top category for increased prices—following April and March, when inflation rose 10.3% and 9%, respectively.

  • It is the only category that continues to move in lockstep with the CPI, noted Vivek Pandya, lead analyst at Adobe Digital Insights.

“Some [shoppers] might shift to lower-cost grocery items if they have flexibility to do that,” Pandya told Retail Brew. “They might prefer the cheaper variant of a particular pasta or something…[But] because the prices are increasing kind of across the board, availability for some of those cheaper options also becomes a little more limited.”

  • Walmart US CEO John Furner said during a recent Q1 earnings call that customers are opting for more private-label products as “inflation pressures” persist.

Looking ahead…Consumers spent $78.8 billion online in May, a 7.1% YoY bump, per Adobe. But Pandya said that it’ll be worth watching if inflation continues to increase at a slower pace across categories in the coming months, while doing so at a level that doesn’t scale down demand too heavily.—KM

Retail news that keeps industry pros in the know

Retail Brew delivers the latest retail industry news and insights surrounding marketing, DTC, and e-commerce to keep leaders and decision-makers up to date.