I bought a box of tall kitchen garbage bags yesterday and paid the same price that I paid last October, but something made me take note of the quantity. I discovered that I only got 110 bags yesterday compared with 120 in the same size box a year ago. Same price, same packaging, fewer bags. Most people wouldn't even notice.
Before anyone tries to blame this on Joe Biden and Kamala Harris, this is NOT the result of inflation, although the practice does have a name. While it’s true that companies may be raising their prices on many consumer items, they have also employed a more covert tactic known as "shrinkflation" — offering a smaller quantity at the same or similar price, so when you break down the cost per unit, the newer items are actually more expensive.
The trash bags are just one example. You’re probably getting fewer potato chips in your bag, or your candy bar may be smaller. I recently bought a carton of ice cream that used to come in half-gallon (2-quart) containers, but has been shrinkflated to 1.5 quarts.
And have you bought a 5-pound bag of sugar recently? No, you haven't. It's now a 4-pound bag.
I could go on, but I’ll turn this over to Edgar Dworsky, a consumer educator who has been cataloging examples of shrinkflation for several years, and obviously knows a lot more about it than I do. He was interviewed on the subject by Marketplace.com last year and suggested that the practice is somewhat dubious. "I think shrinkflation is a nasty way to pass on a price increase," he said. "It’s just a sneaky practice (employed by) manufacturers."
You’ll recall that a lot of companies took advantage of the COVID pandemic to raise the prices of various consumer goods, often attributing the price hikes to (real or imagined) worker shortages or supply chain issues at the time. Remember trying to find toilet paper in 2020-21? Now that the pandemic has slacked off a bit, many companies may be reluctant to lower their prices, content to maintain their higher profits through other pricing or quantity manipulation.
That gives politicians and right-wing pundits an easy target to characterize all price increases as “inflation” and blame it all on the Democratic administration, but there is more to the story than the partisan hackery that you’ll probably hear on Fox News.
There is also "skimpflation" that occurs when a manufacturer "reformulates a product using cheaper ingredients or less of the good ingredients,” Dworsky said. One producer of a butter substitute, for example, reduced its contents from 64% oil to 39% oil to cut costs, but consumers noticed the difference and posted negative reviews on the company’s website. The company apologized, claiming it changed the formula to “make it spread more easily.”
“They were trying to fatten their bottom line by using less oil, which is very expensive now,” Dworsky said, “but they heard the outcry, and now on store shelves we’re starting to see the old 64% come back” just as inconspicuously as it went away.
Dworsky acknowledged that there are sometimes good reasons for companies to increase prices, which he called a “fact of life.” Higher prices on raw materials, supply and demand, labor contracts, transportation costs, taxes and competition are just a few of the reasons. It’s only a trigger issue if it’s done in a sneaky way, he said. And it’s true that food, among other consumer products, is more costly now than it was a few years ago. Before COVID, I used to spend around $150-200 on a typical grocery order. Yesterday my total was $304.
So now, just for fun, I’m going to pay closer attention to the quantities and prices of the products I buy, especially at the supermarket. Maybe you’ll want to do the same. We can make a game of it.
Meanwhile, Dworsky says he can accept that prices are higher for many consumer goods, but there is one grocery item that, if manipulated, could send him over the edge. “That’s if I open a carton of eggs and there’s only 11,” he said.
Read more here: https://www.marketplace.org
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Marketplace is a public media outlet that produces broadcast shows, podcasts, digital reporting and more. Marketplace is committed to covering business and the economy in ways that everyone can understand, not just those on Wall Street. Its mission is to raise the economic intelligence of the country by sharing economic perspectives and realities relevant to all communities — especially those who often go unrepresented in financial news.
