By Patricia Jones, Alliance Community Task Force: Creating Opportunity
Remember how we used to buy our coffee in 3 lb cans? A three pound can of coffee weighs 48 ounces. When I searched for a 3 lb can of Folgers online, I found some that weighed 43.5 oz, but most were 40.3 oz. This is shrinkflation.
In shrinkflation, items shrink in size or quantity, but the price remains the same.
Shrinkflation happens a lot when we have inflation. Manufacturers can reduce their costs without raising their prices, and consumers often don't notice the change. Who noticed that Procter & Gamble reduced the number of squares in a mega roll of Charmin toilet paper from 264 to 244? (12=48: Does that mean 80 fewer squares?) And a square that used to be 4 1/2 x 4 1/2 is now 4 x 3.92 inches.
Sometimes the game is played by switching from pounds or ounces to grams. In the 1980's, one-pound bags of coffee became 400 grams, not 453.6 grams.
Businesses realize that many consumers are price conscious. They notice when the price goes up, but they don't notice that the size went down.
Supermarket News reviewed a report from Pennsylvania Senator Bob Casey. The publication tells us, "Common household and grocery items noticeably decreased in size from January 2019 to October 2023 yet unit prices rose more than 20%. The report also called out products like Gatorade bottles (which have 12% less liquid), Double-Stuffed Oreos (weighs 6% less), and Walmart’s Great Value Ultra Strong paper towel roll (28% fewer sheets)."
Forbes magazine says the biggest shrinkflation offenders are the dollar stores. Thirty years ago it was Walmart. These companies have enough sales that they can demand that manufacturers repackage goods into smaller sizes, knowing that most of their customers won't notice the price increase per unit, or won't see that shopping someplace else is a better alternative.
Even services suffer from shrinkflation. If you've traveled recently, you've undoubtedly noticed that your hotel room isn't cleaned every day. Unless you call the front desk and request that service, it won't be cleaned until you check out. You may still get your towels swapped, but that's it. And you may have to ask for that!
Shrinkflation is calculated into the inflation rate by the government, which looks at per unit prices. But the government doesn't look at "skimpflation," where companies use cheaper materials to make their products. Why do so many companies use corn syrup rather than sugar to sweeten their products? Why do your paper towels and toilet paper feel different?
Have corporations been squeezed by inflation? What has happened to their profits since Covid in 2020? Corporate profits were up 22.6% in 2021, 9.8% in 2022 according to the Bureau of Economic Analysis. The most recent statistic, from third quarter 2023 (July-September) showed corporate profits increased $108.7 billion, but the BEA doesn't say what total profits are. There is a reason why the stock market is so high.
Next time you are buying groceries, pay attention to the size of the packages you are purchasing. And look at the tag on the shelf that gives the per unit cost. Did the price really stay the same?