The cost of groceries online continues to soar, reaching another record high of 14.1% year-over-year. This was the finding of the latest inflation data from the Adobe Digital Price Index (DPI).
Inflation Drives Online Grocery Prices Up 14%
In August 2022, grocery prices saw their highest annual increase, while online prices increased 0.4% year-on-year and 2.1% month-on-month.
Consumer Spending Online Increasing
According to the report, online inflation in August was driven by groceries. Meanwhile, consumer spending online in the same month reached $64.6 billion, an increase of 6.5% year-on-year, attesting to the overall strength of the digital economy.
Showing an uptick in online spending despite prices rising highlights the value of small businesses selling products online. Furthermore, categories such as groceries and pet products, which have not traditionally been sold online, are showing increasing demand among online shoppers.
As Patrick Brown, Vice President of Growth Marketing and Insights at Adobe said: “The modest uptick we see in online prices for August was driven in large part by rising food costs that show no signs of abating, just as seasonal discounts in a category like apparel phased out through the end of summer.
“Consumer demand for e-commerce also remains steady and will keep prices elevated, especially for growing categories such as groceries, pet products and other consumer staples,” Brown added.
Inflation in the Digital Economy
Adobe’s Digital Price Index is a comprehensive measure of inflation in the digital economy. In August, 12 of the 18 categories that were tracked by the DPI saw year-on-year price increases. Our of the 12 categories that witnessed growth in prices, groceries saw the biggest rise. This was followed by apparel, where prices were up 4.9% year-on-year, and then personal care products, which witnessed a 2.7% increase.
By contrast, electronics’ prices were down by 10%, as were computers, which saw a 12.6% year-on-year drop in prices.
Adobe’s Digital Price Index provides valuable insight to small businesses about the consumer spending habits. It also emphasizes the importance of selling to a digital audience, including the sale of groceries.
Raising interest rates only affects so many products. Namely houses, cars and credit cards. It takes awhile for those to start impacting things like groceries, which are just now pricing in the high cost of fuel over the summer.