What Is Shrinkflation, and How Is It Costing You?

Do you feel like your money just doesn’t stretch as far as it used to? You might be right.

Shrinkflation is an epidemic at grocery stores across the nation, but consumers have only recently realized what their favorite brands are up to.

While keeping the same basic design of their products’ packaging, major brands are downsizing their products at an alarming rate. While the products keep getting smaller, the price stays the same. That’s shrinkflation in a (smaller than usual) nutshell, and it’s poised to become a big problem for shoppers.

Why Are Companies Shrinking Their Products?

Simply put, shrinkflation is a response to inflation. As of February 2022, the U.S. Bureau of Labor Statistics reported a 7.9% inflation rate—the highest rate in forty years. While the price hikes at the gas pump are the most obvious sign of inflation, it has an impact on every aspect of our lives.

According to MarketWatch, ‘[t]he consumer price index rose 0.6% in the first month of the new year, driven by big advances in rent, food and energy. The increase exceeded Wall Street’s forecast of a 0.4% gain.” The Consumer Price Index, or CPI, measures the change over time for goods and services. It shows how far the average person’s dollar will stretch—and right now, those dollars aren’t stretching very far.

Man comparing a receipt to his phone
Adobe Stock

Compounding the problem are ongoing labor shortages and supply chain interruptions, which only drive prices of consumer goods higher. Instead of increasing the price of their products, many brands are sneakily shrinking them instead. Unfortunately, prices are likely to rise in the coming year, so you’ll be paying even more for less. Axios reported that “52% of U.S. businesses ‘expect prices of their products to continue rising in 2022,’ while only 3% expect them to decline, according to an S&P Global Market Intelligence poll.”

Shrinkflation can make the Consumer Price Index more difficult to calculate, too. As Daniel Liberto explains for Investopedia, “Changes are minimal and limited to a small range of products, yet are still enough to make accurate measures of inflation more difficult to gauge.”

This hidden inflation is designed to sneak under the radar of most consumers, who do not typically check package sizes or cost-per-ounce breakdowns.

Read More: Budgeting Questions to Keep Your Spending in Check

How Can They Get Away with This?

The sneakiest thing about shrinkflation is that the product packages usually look identical to the old ones. Unless you’re paying very close attention, you might not even realize that you just paid the same price for less product.

And yes, this practice is legal. Dr. Tom Fullerton, a professor of economics at the University of Texas, told KFOX14 that companies have every right to change their package sizes. “This is legal, companies can change prices of their products however they want this way they do it and it reduces the amount of complaints that the companies receive as a consequence of this stuff,” he explained.

By sneakily shrinking their products, companies are avoiding the pushback from their customers that comes with price hikes. As Peter Butler pointed out for CNET, “[c]onsumers are more attuned to cost than package size, which affects their shopping decisions less than price. You might notice when the cost of your cat treats goes up a dollar, but do you notice when the amount of treats shrinks?”

Couple buying food at a grocery store
Shutterstock

But now that consumers are finally realizing how widespread this practice is, they are sharing examples on social media and message boards. An increasing number of news networks and websites are running stories about shrinkflation, raising awareness of this issue. While it’s nothing new, the scale at which companies are now downsizing their products is often shocking.

Shrinking package sizes have an impact on more than just your grocery budget. Not only are you paying more per ounce for the same products you’ve always bought, but because the package sizes are smaller, you may need to take more frequent trips to the store. That means using even more gas, causing your household budget to become stretched even tighter.

If you usually order groceries or supplies online, you’ll have to place orders more often. This places more strain on the supply chain as warehouses and delivery drivers work harder to meet the demand.

Examples of Shrinkflation

You can find plenty of examples of shrinkflation online from consumers and watchdog groups. For example, a family-size box of Wheat Thins used to be 16 ounces, but now it’s just 14 ounces. That’s a reduction of 28 crackers per box. Families aren’t getting smaller, yet “family size” packages seem to be shrinking in every aisle of the grocery store.

Snack foods aren’t immune to downsizing. Doritos recently reduced their product size from 9.75 oz. to 9.25 oz. or 5 fewer chips per bag. A representative from Frito-Lay confirmed the shrink to Quartz, saying, “Inflation is hitting everyone…we took just a little bit out of the bag so we can give you the same price and you can keep enjoying your chips.”

Young woman reading information about the product on the phone
Shutterstock

That’s understandable enough, given the current state of the global supply chain, but Doritos did not publicize the downsizing of their product. They just snagged five chips from each bag and apparently hoped that consumers wouldn’t notice.

While most products keep the same packaging, a few companies are introducing new labels or containers as part of their shrinkflation push. When Quartz pushed Gatorade on why their new bottles contain four ounces less than the old ones but still cost the same price, here’s what a representative said:

“Basically we redesigned the bottle, it’s more aerodynamic and it’s easier to grab. The redesign generates a new cost and the bottles are a little bit more expensive…this is only a matter of design.”

This “matter of design” resulted in a 14% price increase per ounce compared to the original packaging. If the sticker price had gone up that much, consumers would have been outraged. But thanks to the stealthy nature of shrinkflation, it’s often difficult to know when it’s happening to your favorite brands.

Read More: On a Budget? These Low-Cost Grocery Stores Offer Great Deals

What Can You Do About Shrinkflation?

While filing a consumer complaint might feel like fighting back, your best defense against shrinkflation is paying close attention while you shop. You probably don’t have a spreadsheet tracking package sizes or price per unit over time, so it’s difficult to know when you’re a victim of shrinkflation.

One helpful strategy is to compare brands with similar products. If two brands of toilet paper have a similar price point but one offers 5-10% more sheets per package, then you can assume that shrinkflation might be at play.

“See if a competitor hasn’t changed yet,” consumer advocate Edgar Dworsky told WBRC reporter John Matarese. “And certainly, you can go to a store brand. Store brands tend to be the last ones to downsize.”

Store brands are often made by the same manufacturers as your favorite name brands. Discount grocers such as Aldi and Lidl may offer even more savings—and you might find that you prefer their brand to name brands, anyway.

man in supermarket, grocery store customer
Shutterstock

Another way to fight back against shrinkflation is to buy less packaged food. If you have the option to shop at bulk bins, you can decide exactly how much oatmeal or rice goes into your cart instead of being at the mercy of potentially deceptive packaging. Fresh foods that are sold by weight, including produce and meat, may be subject to price hikes, but at least they aren’t candidates for shrinkflation.  

Finally, if you don’t want to give up your favorites, then make a note of the package sizes. It used to be that Breyers Ice Cream was sold in half-gallon cartons. However, the product has been gradually shrinking since at least 2008. It became a 1.75-quart package, then a 1.5-quart package—a reduction of 25% from the original product. Yet the price didn’t go down. In fact, it went up!

Don’t be fooled by packages that change size without announcing the difference in the product weight. NPR’s Planet Money newsletter cataloged a list of products that had been downsized in June of last year. They found that cereal boxes have been trending toward taller—and skinnier—packaging to mask the shrinkflation of an ounce or more. Plastic bottles may have divots in the bottom that disguise their smaller volume, and even toilet paper squares have less area than they used to.

woman buying food at a grocery store
Shutterstock

When you notice your favorite products are skimpier than before, you can at least make an informed decision about whether to continue with that purchase. Pay attention to the net weight—that’s the amount of product regardless of the package size. Look at changes in the price per unit on the grocery store shelf as well as differences in the number of servings in each package.

You can always find information on message boards like the subreddit r/shrinkflation along with Edgar Dworsky’s website mouseprint.org. Being an informed consumer is the first step to taking control of your household budget. Rather than wondering why your paycheck doesn’t seem to stretch as far as it used to, you’ll be able to make smarter decisions at the checkout line. Don’t let companies gaslight you—packages really are smaller than they used to be.  

Author
Latest News