Dive Brief:
- Though inflation continues to weigh on consumers' wallets, online prices dipped by 1.7% in March compared to the year prior, according to the Adobe Digital Price Index by Adobe Analytics. Last month was the seventh consecutive month of year over year price declines across more than half of the categories Adobe tracks.
- Grocery, apparel and personal care products rose 10.3%, 6.6% and 4.4%, respectively. By contrast, electronics and furniture/bedding products dropped by 12.9% and 0.9%, respectively, according to the report.
- Among the other categories with declining prices were flowers and gifts (24.3%), appliances (4.9%), toys (6.6%) and home and garden products (4.9%), per the Adobe report.
Dive Insight:
After record inflation last year made headlines, the trend continues to impact retailers and consumers alike this year. As a result, some consumers have changed their shopping behaviors by choosing different brands and searching for discounts, per a survey from Blackhawk Network.
The perception of inflation might explain part of the shift in consumer spending habits. A Dunnhumby Consumer Trends Tracker survey found that consumers thought inflation was 24.3% in October and November 2022, much higher than the actual figure of 12%. Regarding grocery store profitability, survey respondents said they thought grocery stores were profiting 35.2%, far more than the exact figure of 2.5% at that time.
Though the Consumer Price Index shows that inflation is beginning to cool, consumers still feel the pinch. Per the Adobe Price Index, grocery prices saw a slight bump of 0.4% month over month in March, but grocery price increases have begun to slow down from their September peak of 14.3% year over year.
