Inflation not hurting online sales at the start of the holiday season

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By Bill Peters

“Despite inflationary pressures and the rising cost of borrowing, there has not been a significant drop in early holiday shopping this year,” Adobe said in an October online shopping recap.

So far this holiday season, consumers have spent roughly the same online as this time last year, despite concerns that higher prices could dampen demand, Adobe Inc. reported. Thursday.

Shoppers spent $72.2 billion online in October, up 10.9% from September and down slightly from the $72.4 billion spent in October last year, revealed Adobe (ADBE) on Thursday in its first report on this year’s holiday shopping season. The report came on the same day as government data showed the decades-high inflation seen this year may ease.

Read more: US inflation has stopped boiling, but it will take much longer to cool down

“Despite inflationary pressures and the rising cost of borrowing, there has not been a significant decline this year in early holiday purchases,” Taylor Schreiner, senior director of Adobe Digital Insights, said in a statement. . “With more than $72 billion spent online in October, e-commerce demand has proven to be sustainable and resilient, despite a challenging macroeconomic environment.”

Shoppers, Adobe said, were “pulled” by bargains for electronics and toys, where markdowns hit 17% and 15%, respectively. Adobe said computers sold online were sold at 10% discounts, with single-digit discounts on televisions, sports equipment and furniture.

See also: The holiday shopping season has a different issue this year than last – and it could lead to deals

Analysts said holiday discounts are likely to be plentiful this year as retailers try to reduce inventory of unwanted off-season clothing, TVs and goods, following supply chain issues and… a consumer shift towards essential expenses that have become more expensive. But others said that even with a flood of holiday deals, the door price customers end up paying this year could be higher than during the pre-pandemic holidays due to soaring prices overall. .

An Adobe representative, however, said via email that the company does not see the $72.2 billion in revenue being driven by higher prices. In a separate report on Thursday, the digital media and analytics provider said online prices in October fell 0.7% year-on-year. But they were up 0.3% from the previous month. Online sales volumes for the month were not immediately available.

Read: Inflation set to send holiday sales to record high, even as retailers cut seasonal hiring

Adobe released the reports as government data showed on Thursday that consumer prices rose 0.4% in October. Prices fell for items like clothing and furniture, while grocery store prices and rents rose. Wall Street was hoping a slowdown in prices would prompt the Federal Reserve to forgo further interest rate hikes, which the central bank has used in an effort to keep the economy from overheating.

Last week, the National Retail Federation, a major industry group, said it expected holiday season sales – measured as those running through November and December – to increase between 6% and 8% from a year ago, to between $942.6 billion and $960.4 billion, a potential record. The group forecasts non-store and online sales of between $262.8 billion and $267.6 billion, representing year-over-year increases of 10% and 12%, respectively.

Jack Kleinhenz, chief economist at the NRF, on a call with reporters, said many customers were looking for bargains. And he added that part of the NRF’s increase forecast would come from rising prices.

Read more: Rising food prices slowed in October, but some items rose as much as 43%. So what’s going on?

-Bill Peters

 

(END) Dow Jones Newswire

11-12-22 1348ET

Copyright (c) 2022 Dow Jones & Company, Inc.

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