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05/12/2022

Online prices continue to drive grocery inflation growth

Dan Berthiaume
Senior Editor, Technology
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Numerator is tracking steady increases in grocery prices.

Grocery inflation continues to rise, particularly in the e-commerce channel.

According to monthly inflation insights from Numerator, overall, grocery prices continued to climb in April 2022, particularly online and in dollar stores. For the four-week period ending May 1, 2022, grocery prices were up 12.4% compared to the year-earlier period, a rate that has steadily increased from approximately +7-8% at the beginning of the year. 

Meanwhile, health & beauty prices remain elevated, but show signs of stabilization. Health & beauty prices were up 8.4% compared to the year-earlier period, down from early 2022 levels but above early 2021 inflation rates. 

Household items inflation climbed back toward February 2022 peaks. Prices for household items were up 13.8% from the year-earlier period, a rate that is up from prior weeks but down slightly from its highest point (+14.4%) in mid-February. 

Numerator analysis also found that online grocery inflation spiked to overtake price increases in the dollar channel. For the four-week period ending May 1, grocery inflation in the online channel passed the dollar channel (+17.2% year-over-year and +16.2% year-over-year, respectively); growing steadily since fall 2021.

Throughout 2022, Numerator data reveals that both online and dollar channels have been significantly more affected by inflation than food, mass, and club channels. Grocery prices in the club channel were up 7.6% year-over-year in April, less than half of the inflation rate seen in the online and dollar channels.

Consumers across rural, urban and suburban markets are now similarly impacted. Suburban consumers were paying more for grocery items for most of 2022, but the gap narrowed recently, with suburban, urban and rural consumers experiencing similar rates of inflation (+12.6%, +12.3%, +12.3%, respectively).

Numerator also examined some key ethnic and generational consumer grocery trends, including:

  • Black consumers’ grocery inflation rates have overtaken those of Asian consumers. Black consumers saw a 13.9% year-over-year increase in grocery prices, for the week ending May 1, the highest rate of any ethnic group tracked by Numerator. Previously, Asian consumers saw the highest grocery inflation rates of any ethnicity tracked by Numerator.  
  • Gen Z is most impacted, but other generations are catching up. Gen Z consumers saw a year-over-year grocery inflation rate of +13.6% for the four-week period ending May 1, followed by Gen X (+12.7%), millennials (+12.2%), and boomers+ (+11.9%). 

Adobe: Online inflation growth slows
Recently released online inflation data from Adobe indicates that the rate of overall e-commerce price increases is decreasing. According to the latest Adobe Digital Price Index (DPI), online prices increased 2.9% year-over-year (YoY), down from the record 3.6% YoY increase in March, a decrease of 0.5% month-over-month (MoM). Adobe estimated 10.3% year-over-year growth in online grocery prices, more modest than Numerator’s projection.

Percent changes in Numerator's Price Pulse are calculated at a category level. The average price per item within a category is based on verified purchase data from over 100,000 Numerator panelists, and the average price from the past four weeks is compared to the same period one year ago. The Price Pulse includes a cross-channel view of prices, as well as channel-specific views and cuts by consumer demographic groups. Numerator’s Financial Outlook Tracker leverages an ongoing survey that collects approximately 10,000 responses from active shoppers each week. Consumers are asked to rate their current financial situation in addition to sharing spending intentions. The tracker has additional breakouts by ethnicity, generation, income level, and urbanicity.