Economy
12 January
Inflation cools to 6.5% in December, discounts drive ecommerce prices
Check out December 2022 inflation data from the U.S. Consumer Price Index and Adobe Digital Price Index.

Photo by Angèle Kamp on Unsplash
Check out December 2022 inflation data from the U.S. Consumer Price Index and Adobe Digital Price Index.
Like the temperature outside, inflation started coming down in October, and ended the year at its coolest point.
Data for December 2022 showed that deceleration of price increases became a three-month trend to end the year. While inflation remains high and holiday discounting created some noise in the data, the price increases that overheated to 40-year highs in June are relenting.
Let’s take a look at key figures from the Consumer Price Index and the Adobe Digital Price Index.
The federal government's most closely-watched inflation gauge pointed downward in December.
Prices across the U.S. economy fell 0.1% on a monthly basis, according to the Consumer Price Index. On an annual basis, the inflation rate cooled to 6.5%, which is down from 7.1% in November. The annual rate marked the lowest increase since October 2021, when inflation began its upward march in earnest amid supply chain chaos.
A decrease in gas prices was “by far” the biggest contributor to the monthly decrease, per the CPI report. On an annual basis, the increases in food and energy were below totals recorded for November.
Food inflation continues to be volatile. Even as the overall rate of monthly food inflation slowed to 0.3% in December from 0.5% in November, three of the primary categories showed increases. Egg prices increased 11.1% for the month. The food at home index, which measures groceries, continues to run well ahead of the overall inflation rate at 11.8% year-over-year, with cereals and bakery rising 16.1%.
Core inflation, which leaves out volatile food and energy prices, rose 5.7% on an annual basis, also below November’s reading. On a monthly basis, the core inflation rate of 0.3% was slightly above the 0.2% increase in November. Increases in shelter prices continued to drive this number up. Among consumer categories, increases in apparel and household furnishings were also among the key drivers, while personal care prices decreased slightly for the month.
Is three a trend? The slowdown in price increases began in October, and continued throughout the final three months of the year. This came after the Federal Reserve aggressively rose interest rates to combat inflation for much of 2022. As we begin 2023, prices are still high, though they are falling. Interest rates are still high, and the Fed intends to keep them there. The effects of both of these forces will continue to filter out across the economy, and weigh on consumers who are proving more cautious with discretionary funds. The bigger trend won't change in a month, but this latest inflation report is a sign that things are heading in the right direction.
Digital Price Index vs. Consumer Price Index, 2019-2022. (Courtesy of Adobe)
Ecommerce prices had a mixed record in December.
On an annual basis, online prices fell 1.6% in December compared to the same month of 2021, according to the Adobe Digital Price Index.
But, on a monthly basis, prices rose 1.1%. indicating that November’s Cyber Week discounts were particularly deep.
Holiday deals continued to drive down prices, as nine of the 18 categories tracked by the DPI recorded price decreases.
Computers fell 16.2% year-over-year.
Electronics prices fell 12% year-over-year.
Toys decreased 7.1% year-over-year.
Sporting goods fell 5.9% year-over-year.
On a monthly basis, each of these categories increased or were flat, showing the impact of Cyber Week's massive deals. Only six categories saw prices fall month-over-month.
Inflation also continued to cool in non-promotional categories that weren’t subject to holiday discounting.
Grocery prices continued to decelerate, even as they followed the highs of food inflation across the economy. They were up 13.5%, continuing a steady decrease from September’s record high of 14.3%.
Personal care prices rose 1.6% year-over-year, which was down from increases that reached as high as 3% in October.
Medical equipment and supplies also fell 4.1%, which was also down from 6.6% in November and 5.3% in October.
Nine categories saw price increases in all. Others seeing increases were apparel, pet products and furniture/bedding.
Overall spending in ecommerce reached $95.1 billion for December, according to Adobe. That’s a 5.8% increase over the record-setting figures of 2021. While the overall spending figure is not adjusted for inflation, Adobe notes that the increase was “clearly driven by net-new demand, not higher prices.."
Price changes by category, Adobe DPI. (Courtesy of Adobe)
Dealboard has funding and M&A updates from ecommerce aggregators and forecasting software.
Hunter is joining ABG's portfolio. (Courtesy photo)
This week, the aggregator space is active with M&A, IKEA is ready to roll out newly-purchased warehouse management software and Authentic Brands Group acquired a boot icon. Plus, there’s new investment to report for YouTube influencer Emma Chamberlain’s coffee brand and retail forecasting.
Here’s a look at the latest deals:
Chamberlain Coffee, the consumer brand founded by YouTube influencer Emma Chamberlain, raised $7 million in new funding.
The financing included backing from existing investors including Blazar Capital, Chamberlain and United Talent Agency. New investors include Volition Capital, Electric Feel Ventures, L.A. Libations and Noah Bremen, founder of PLTFRM.
The new funding follows the launch of a Ready-to-Drink (RTD) product and coffee pods. Previously, the brand raised a Series A in August 2022.
"Creating a uniquely inviting coffee brand has been my dream for so long now, and having key investors back us allows us to build Chamberlain Coffee in ways that feel fresh and exciting,” said Chamberlain, in a statement. “There are so many products I am eager to develop and projects I'm excited to get working on. With such an incredible team and group of investors I am more excited than ever to see what the future holds for Chamberlain Coffee."
Impact Analytics, a software company for retail supply chain and merchandise planning, raised new funding from Vistara Growth.
The new investment, the amount of which was not disclosed, comes after Impact raised funding in February 2021 and October 2022 from Argentum.
The funding will help Impact Analytics further develop its Impact Analytics SmartSuite product portfolio, which is designed to help optimize forecasting, merchandising and end-to-end lifecycle pricing. Rather than the traditional forecasting approach of basing decisions on the preceding year, Impact Analytics applies a model that includes 150 variables from internal and external sources, while combining recency and history. Clients include BJ's Wholesale Club, Dick's Sporting Goods, Puma and Tapestry.
Selva Ventures, a venture capital firm focused on consumer brands that promote healthier living, closed its second fund at $34 million, TechCrunch reported.
With the new funding, Selva will invest in brands across categories including health, wellness, beauty and personal care. The fund expects to write checks of $1-2 million in seed and Series A startups, while assisting in areas like finance, operations and retail partnerships.
Backers of the second fund include Unilever Ventures, PagsGroup and Obelysk.
Nautica and Forever 21 owner Authentic Brands Group acquired the intellectual property of Hunter, a 160-year-old British outdoor lifestyle brand known for its Wellington boots.
With the deal, ABG appointed longtime partners Batra Group and Marc Fisher to execute retail and ecommerce operations, as well as continue to expand the brand in the UK and U.S., respectively.
“At the intersection of fashion and outdoor, Hunter introduces another elevated global brand to Authentic’s diverse Lifestyle portfolio,” said Authentic CEO Jamie Salter, in a statement.
Terms of the deal were not disclosed.
The investment arm of IKEA parent Ingka Group acquired the warehouse management software platform Made4Net.
As a result of the deal, Made4Net’s software will be deployed across IKEA’s 482 stores and fulfillment centers. Made4Net will continue to operate as an independent subsidiary of Ingka, with a headquarters in New Jersey. CEO Duff Davidson will remain at the helm of the company.
“Our business currently requires a better fulfillment operations system with more accurate data that better supports handling for our customers,” said Tolga Öncu, head of retail at Ingka Group, in a statement. “Our goal is to become leaders of life at home, serving more people in an omnichannel reality, whenever and however customers choose to meet us.”
European ecommerce aggregator SellerX acquired Elevate Brands, a U.S.-based aggregator.
The combined companies will be known as SellerX Group. It will comprise a portfolio that includes 80 Amazon-native private label consumer brands in categories including sports and outdoors, home, mobile accessories, pets and consumables. The portfolio will span over 40,000 products.
With the deal, SellerX Co-CEOs Philipp Triebel and Malte Horeyseck will lead SellerX Group, while Elevate Brands cofounders Ryan Gnesin, Jeremy Bell and Robert Bell will remain in key leadership positions.
“This acquisition combines our know-how and diversified portfolios of strong brands with a market-leading technology platform and strong operational infrastructure,” said Triebel, in a statement. “By leveraging our combined strengths, I am convinced we are well-positioned to drive further consolidation in the industry.”
Ecommerce aggregator Society Brands acquired Wolf Tactical, a tactical gear company.
Founded in 2017 by Tim Wu, Wolf Tactical makes products including DC belts, range belts to weighted vest and tactical backpacks.
"I started Wolf Tactical by myself as a side hustle with very limited knowledge of business and entrepreneurship. A combination of hard work and relentless learning allowed me to build it into a multi-million-dollar business," said Wu who will remain as brand president, in a statement. "With the help of Society Brands, I have access to untapped potential that I would not be able to achieve by myself.”