Online Grocery Prices Show First Decline In 27 Months, Adobe Reports

Online grocery prices fell by 0.2% in August compared to the previous month, the first such drop in 27 months, according to the Adobe
ADBE
Digital Price Index (DPI) report released today.

While grocery prices in August still were 5% higher than a year earlier, the month-over-month decline is significant because it breaks a more than two-year long pattern of steadily rising online grocery prices. While other online categories have been showing consistent price decreases throughout this year, the grocery category has resisted that trend, with prices reflecting the continued strong demand for online grocery shopping.

Overall online prices were down 3.2% compared to a year ago. On a monthly basis prices were up 0.4% compared to July.

It was the 12th consecutive month of year-over-year overall price declines, according to Adobe.

On a yearly basis, 11 of the 18 merchandise categories tracked by the index showed declines in August. On a monthly basis, six of the 18 categories had price declines.

The latest DPI report also shows that categories that saw their sales soar during the pandemic are now seeing the impact of reduced demand.

Computer prices were down 14.2% annually, and electronics were down 11.6% year-over-year. Appliances, home and garden, and sporting goods were all down more than 6% on an annual basis.

Flowers and related gifts was the category with the biggest year-over-year price drop, down 31.4%.

The seven categories that had year-over-year price increases were personal care, pet products, grocery, non-prescription drugs, tools and home improvement, medical equipment and supplies, and apparel.

Pet products, like grocery, has been another category that has resisted the trend toward lower prices, but even in that category the rate of increase is slowing. Pet products were up 5.5% year-over-year in August and up 0.1% on a monthly basis.

Analysts are expecting that the Consumer Price Index data, scheduled to be released tomorrow, will show inflation ticked up in August, after a period of slowing increases. The CPI is expected to show prices increases of 3.6%, on an annual basis, up from July’s 3.2% rise.

Another key economic barometer, August retail sales, is scheduled to be released on Thursday.

The Adobe Digital Price Index uses Adobe Analytics to analyze over one trillion visits to retail sites, and over 100 million items across 18 product categories.