Online Prices Down 2.3% In May; Biggest Decline In Three Years

Online prices declined 2.3% year-over-year in May, the biggest drop recorded since the start of the pandemic, according to the Adobe Digital Price Index report released today.

The Adobe report is another sign that overall inflation is easing. In April, consumer price index inflation was below 5% for the first time since June, 2021. That downward trend is expected to continue when the May CPI numbers are released.

It also showed a continued trend away from big ticket items, as prices for staples such as groceries continue rise. The appliance category had its biggest price drop since Adobe began tracking digital prices in 2014. with appliance prices down 7.9% year over year.

That echoes recent findings from the Commerce Department’s retail sales figures.

For online prices, May was the ninth consecutive month of an overall, year-over-year decrease, according to Adobe.

On a month-over-month basis, online prices were down 1.2% in May, compared to April. The month-over-month decline also was significantly greater than in April, when prices were down 0.7% over the previous month.

Eleven of the 18 categories tracked in the Digital Price Index had price drops in May. Grocery prices, however, continued to climb, although the rate of increase in that category has been slowing for the past eight months, after hitting a record high in September, 2022.

Grocery prices were up 8.2% year-over-year in May, and up 0.3% over April. The May increase in grocery prices was significantly below the 9.3% year-over-year jump in April.

Demand remains high for online grocery delivery, despite the high prices, and that is contributing to persistent inflation in the category, according to Adobe. Consumers increasingly are shifting more of their grocery spending to online purchases, Adobe reported.

Other notable categories in the May report included:

• Personal care products – This category was up 2.7% year-over-year and down 0.3% compared to April. This is another online category that has seen persistent, long-term inflation since September, 2020.
• Appliances – Prices were down 7.9% year-over-year, the biggest decline in appliance prices since Adobe began tracking prices in 2014. Appliance prices also fell compared to April, down 2.4%.
• Home and Garden – Prices dropped 6.3% year-over-year, and were down 0.9% monthly.

The categories in which prices increased, year-over-year, in May were groceries, personal care products, pet products, non-prescriptions drugs, medical equipment and supplies, tools and home improvement, and apparel.

In addition to appliances and home and garden, the categories with year-over-year price drops were flowers and related gifts, electronics, books, toys, computers, furniture/bedding. jewelry, sporting goods, and office supplies.

The Adobe Digital Price Index is designed to be the digital complement to the Consumer Price Index, which tracks offline prices. The Digital Price Index uses data from over one trillion visits to retail sites, and tracks over 100 million products across 18 categories.