US online retail sales surge 7% January-April: Report

US online sales: Online retail sales in the United States witnessed 7 per cent increase from January to April this year, as indicated by a report from Adobe Analytics released on Thursday. The surge was propelled by robust demand for groceries and more budget-friendly discretionary items.

The significance of this uptick in online spending lies in the spotlight on consumer discretionary spending amid persistent inflationary pressures, prompting shoppers across various categories to seek out more economical options.

According to Adobe's data analysis, there has been a notable shift towards purchasing cheaper units in categories such as groceries and personal care during the first four months of the year. This trend is exemplified by the increase in the share of least expensive groceries, which rose from 36 per cent in January 2019 to 48 per cent in April 2024.

Against a backdrop of an uncertain macroeconomic environment, major retailers like Walmart and Target have adjusted their forecasts for the year. They have also responded by introducing affordable private label food brands priced below $5 and $10, respectively.

Vivek Pandya, Lead Insights Analyst for Adobe, highlighted the consumer behaviour shift, stating, "We are seeing consumers down-shift and spend more on the cheapest goods within a degree, that is helping categories stay resilient and see continued spending, but it also showcases that consumers are having to manage the inflation they're experiencing in housing, gas, and food."

In terms of figures, total online spending from January to April 2024 surged to $331.6 billion, up from $309.8 billion in the same period last year. Notably, grocery spending experienced the highest growth at 15.7 per cent, according to the report.

Looking ahead, Adobe anticipates that online spending in the first half of 2024 will surpass $500 billion, representing a 6.8 per cent year-over-year growth. The report is based on direct-to-consumer transactions derived from over 1 trillion visits to US retail websites.

(With Reuters inputs)