Adobe Analytics: UK Consumers Increase Online Spend as Prices Drop for First Time Since October 2021

The latest data from Adobe Analytics – based on actual online transactions rather than estimates or survey data – revealed that online grocery prices in the UK were 1.2% cheaper during February 2024, when compared with February 2023. This represents the first year-over-year price decrease in essential items since October 2021.

With online prices often a primary indicator of upcoming changes to inflation, this marked decrease in the online pricing of everyday essentials is an encouraging sign for a British public tackling a sustained period of rising inflation and increased living costs.

Leap day boosts consumer spending

Overall, UK online spending eclipsed £8.8 billion in February 2024, up from £8.4 billion in February 2023 (a 5.0% increase). However, of that £400 million uplift, £285 million was spent on 2024’s leap day, February 29th.

Even without this additional day, online spending for the month was still 1.9% higher than February 2023’s figures.

The data also showed UK consumers are stepping up spend on Buy Now Pay Later (BNPL) services to keep monthly spend manageable. February 2024 saw an additional £120 million spent using BNPL services compared to February 2023, taking this February’s total BNPL spend to £1.38 billion.

Overall, BNPL services represented 15.6% of total online consumer spend during February 2024, a 9.5% increase from February 2023.

“While our data shows a 5% uplift in online spend compared with last year, much of this growth can be attributed to the additional shopping day on February 29th and an increase in the use of BNPL services. There are, however, some positive signs for shoppers, with Adobe Analytics recording the first year-over-year decrease in prices for grocery and pet products since October 2021,” said Vivek Pandya, lead analyst, Adobe Digital Insights.

Online grocery and pet product prices fall

For the first time in over two years, Adobe Analytics price tracking showed a year-over-year drop in online prices for groceries (-1.2% vs. February 2023) and pet products (-0.5% vs. February 2023), with average UK online retail prices across all categories dropping by 8.2% compared to February 2023.

However, average prices were up slightly (+0.6%) on a month-to-month basis, largely as a result of prices normalizing in categories such as apparel, appliances, jewelry, and home and garden supplies after heavy discounting in January.

On a monthly basis, the online price of groceries during February 2024 only increased by 0.1% when compared with January 2024, while the online price of pet products remained flat over the same period.

In contrast, February 2023 saw more significant monthly price increases, with online grocery prices rising by 5.3% compared with January 2023, and online pet product prices surging by 6% over the same period.

Additional insights include:

February growth masks continued pressure on consumer spending power

Valentine’s Day sees spend on romantic gifts soar

About the Adobe Digital Economy Index

The Adobe Digital Insights team used Adobe Analytics to analyse hundreds-of-millions of visits to retail sites from UK consumers in February, tracking 100 million stock keeping units (SKUs) across 18 product categories to provide the most comprehensive view of the UK digital economy. Adobe Analytics is part of Adobe Experience Cloud, relied upon by major retailers to deliver, measure, and personalise shopping experiences online.