Online grocery prices continue to rise, even as inflation is generally lower

Online grocery prices were up 9.3% in April from a year ago, despite lower prices in most categories tracked by the AdobeADBE Digital Price Index. The April numbers were released today by Adobe.

Today’s report shows once again how persistent inflation is in the online grocery category. Demand for buying groceries online remains strong, despite higher prices.

While the pace of price increases in the online grocery category has slowed over the past seven months, groceries continue to see sharp price increases in categories tracked by Adobe.

“Consumers are increasingly buying more of their groceries online, and overall this category has moved in steady step with the Consumer Price Index,” Adobe reports.

Adobe reported in March that the grocery category saw the biggest jump in online sales in 2022, with spending up 10.8%, to $86.8 billion.

Overall, online prices fell 1.8% in April compared to April 2022, driven by double-digit declines in some of the largest online categories, including electronics.

Reducing inflation in e-commerce

April was the eighth month in a row that overall prices were down, on a year-over-year comparison basis, according to Adobe. Compared to March, prices decreased by 0.7% on a monthly basis.

Eleven of the 18 product categories that Adobe tracks in the Digital Price Index experienced lower prices year-on-year.

Electronics, computers, flowers and related gifts, hardware, sporting goods, toys, books, home and garden, furniture and bedding, office supplies, and jewelry all experienced year-over-year declines.

Electronics prices are down 11.6% annually, and computers are down 15.4% annually.

Play problems

Online game prices fell 5.9% year-on-year in April, and were down 0.2% from the previous month.

The drop in toy prices reflects the difficulty toy manufacturers like Mattel and HasbroHAS are having in getting rid of excess inventory this year. In earnings calls last month, both Hasbro and Mattel said retailers were discounting traditional toys, and delaying return orders, due to excess inventory.

Hardware prices fell 7.1% year over year in April, a record annual decline for the category, and the biggest drop since Adobe began tracking prices online in 2014.

Hardware prices have fallen year-on-year for seven consecutive months, after rising for 29 consecutive months, starting in May 2020, according to Adobe.

Home appliance prices decreased by 2.1% on a monthly basis, compared to March.

Sporting Goods Decreased 6.4%

The sporting goods category also saw online prices drop in April, making it the 12th consecutive month that online sporting goods prices fell year-on-year. Prices are down 6.4% year over year.

Like hardware, sporting goods have enjoyed more than two years of price increases during the pandemic. On a year-over-year basis, prices in this category have increased for 28 consecutive months, starting in January 2020.

Besides groceries, other categories that saw prices rise year-over-year in April were personal care, pet products, over-the-counter medications, tools, home improvement, equipment, medical supplies, and apparel.

The Adobe Digital Price Index is based on an analysis of 1 trillion retail website visits, and over 100 million SKUs in 18 product categories.
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