Shrinkflation is a problem in grocery stores all over the country, but many consumers are only just beginning to see what their favorite brands are doing.
Major brands are shrinking their product sizes at alarming rates, even though they keep the same packaging design. The price of the product is not changing, but it keeps getting smaller. This is shrinkflation, in a (smaller-than-usual) nutshell. It’s likely to be a problem for shoppers.
Why are Companies Selling Smaller ‘Quantities’ of Their Own Products?
Simply put, shrinkflation refers to inflation’s response. The U.S. Bureau of Labor Statistics reported that the inflation rate was 7.9% as of February 2022. This is the highest rate in 40 years. Inflation is evident in the increase in gas prices, but it also has an effect on all aspects of our lives.
According MarketWatch, the consumer price index rose 0.6% during the first month of the New Year, driven by large advances in rent and food, as well as energy. Wall Street had forecasted a 0.4% increase.
The Consumer Price Index (or CPI) measures the time-to-time change in prices for goods and services. It measures how far the average person’s dollars will stretch – and right now those dollars are not stretching too far.
Added to the problem is the ongoing shortage of labor and interruptions in supply chains, which only increase consumer goods’ prices. Many brands are actually shrinking the prices of their products instead of raising them. Many brands are reducing the price of their products to make them more affordable. Axios reported that 52% of U.S. companies “expect the prices of their products will continue rising in 2022,” while only 3% anticipate them falling, according to an S&P Global Market Intelligence survey.
Shrinkflation can also make it more difficult to calculate the Consumer Price Index. Daniel Liberto explains that although changes are small and restricted to a limited range of products, they are enough to make it more difficult to calculate accurate inflation measures.
Hidden inflation is intended to slip under the radar for most consumers who don’t usually check package sizes and cost-per-ounce breakdowns.
What Does Shrinkflation Look Like in Practice
Shrinkflation’s most sneaky feature is that product packaging often looks identical to the original. You might not realize you paid less for the same product unless you pay close attention.
This practice is legal. Professor of Economics at the University of Texas, explained to KFOX14, that companies can change the size of their packages. He explained that this is legal and companies can alter the prices of their products in any way they like. This reduces the number of complaints they receive.
While you might be able to see when your cat treats cost more, do you notice if the number of treats is decreasing?
Now that people are realizing the extent of this practice, they share examples on social media and message board. A growing number of news websites and news media outlets are publishing stories on shrinkflation to raise awareness. It’s not a new phenomenon, but the extent to which companies are reducing their product lines is shocking.
Reduced package sizes can have a negative impact on your grocery budget. You may find yourself spending more per ounce on the same products, and you might need to make more trips to the grocery store. This means that you will need to use more gas and your household budget will be stretched even further.
You’ll need to place more orders if you order supplies or groceries online. This puts more pressure on the supply chain, as warehouses and drivers are forced to work harder to satisfy the demand.
There are many examples of shrinkflation available online, both from consumers and watchdog organizations. A family-sized box of Wheat Thins used be 16 ounces. Now it is only 14 ounces. This is a decrease of 28 crackers per package. While families are not shrinking, “family size” packages appear to be shrinking in every aisle
Snack foods can also be affected by downsizing. Doritos recently decreased their product size to 9.75 oz. To 9.25 oz. Or 5 fewer chips per bag. Frito-Lay representative confirmed to Quartz that the shrinkage was due to inflation. He said, “Inflation has hit everyone…we took just enough out of the bag so you can get the same price and continue enjoying your chips.”
It’s understandable that this is the case given the current global supply chain situation, but Doritos didn’t make public the fact that they were reducing the size of their product. They simply grabbed five chips from each bag, apparently hoping that consumers wouldn’t notice.
While most products still use the same packaging, some companies have begun to introduce new containers or labels as part of shrinkflation. Quartz asked Gatorade why their new bottles contained four ounces more than the old but cost the same. Here’s what a representative had to say:
“Basically, we redesigned our bottle. It’s lighter and easier to grab. The redesign creates new costs and bottles are slightly more expensive…this is just a matter design.”
The “matter” of design resulted in an 14% increase in price per ounce over the original packaging. Consumers would have been furious if the sticker price went up so much. It’s difficult to tell when shrinkflation is happening to your favorite brands due to its stealthy nature.
What Can You Do About Shrinkflation?
Although it might seem like you are fighting back, filing a complaint to the consumer about shrinkflation can be a good way to protect yourself. It’s likely that you don’t have a spreadsheet to track package sizes and price per unit over time. This makes it difficult to determine if you are a victim of shrinkflation.
Comparing brands with similar products is a good strategy. Comparing toilet paper brands with similar prices can be a good strategy. However, one brand may offer 5-10% more sheets per pack. This could indicate that shrinkflation is possible.
Edgar Dworsky, consumer advocate, said to John Matarese that he would check to see if the competitor has changed. You can also visit a retailer brand. The last to downsize are usually store brands.
Many store brands are made by the same manufacturer as your favorite brand names. Aldi and Lidl, discount grocers, may offer more savings. You might even prefer their brand over the name brands.
You can also reduce the amount of packaged food you buy to combat shrinkflation. You can control how much rice or oatmeal you buy by shopping at bulk bins. Although fresh foods sold by weight (including meat) may see price increases, they are not candidates for shrinkflation.
If you don’t want your favorite flavors to go, take a look at the sizes of the packages. Breyers Ice Cream used to come in half-gallon boxes. The product has been slowly shrinking since at most 2008. The original product was a 1.75-quart box, but it has been gradually shrinking since at least 2008. It is now a 1.5-quart box. This represents a 25% reduction. But the price didn’t drop. It actually went up!
Do not be deceived by packaging that changes in size but does not announce the weight difference.
You can make an informed decision whether you want to keep buying your favorite products if you notice that they are less expensive than ever before. Pay attention to the product’s net weight. This is the total product, regardless of how big the package. Pay attention to changes in the price per unit as well as variations in the number of servings within each package.