You open a new bag of chips, and it seems to be half-full of air. You notice that your new roll of paper towels does not seem to last as long as it used to. Many shoppers have the feeling that they are getting less for their money, but they are not always sure if it is real. Is it possible that “shrinkflation” is just a coincidence or a figment of our imagination? The answer is a definitive no. Shrinkflation is a very real and a very deliberate corporate strategy.
What Is Shrinkflation, Exactly?
Shrinkflation is the practice of reducing the size or the quantity of a product while the price remains the same or even increases. It is a hidden and deceptive form of inflation. The size of the package will often stay the same, but the net weight of the product inside has been quietly reduced. This means that you are paying more money for less product.
Yes, It’s a Real and Deliberate Strategy
This is not a coincidence or a series of one-off mistakes. Shrinkflation is a calculated business strategy that is used by the world’s largest consumer goods companies. When a company is faced with rising costs for its ingredients, its labor, and its transportation, it has two choices. It can either raise the price of its product, or it can give you less of the product for the same price. The second option is shrinkflation.
Why Do Companies Do It?
Companies choose shrinkflation because they know that shoppers are much more sensitive to a price increase than they are to a change in the net weight. A customer will immediately notice if the price of their favorite snack has gone up by 50 cents. However, they are much less likely to notice if the size of the package has gone down by half an ounce. This makes shrinkflation a much stealthier and less risky way to pass on costs to the consumer.
Is It Legal?
As long as the company prints the accurate net weight on the package, the practice of shrinkflation is completely legal. There are no laws that prevent a company from changing the size of its products. This is a major loophole in our consumer protection laws. It allows companies to mislead their customers without technically breaking the law.
How Can You Spot It?
The only way to spot shrinkflation is to be a very vigilant shopper. You cannot rely on the size of the package. You must look at the net weight that is printed in small font on the front of the label. You should also pay close attention to the unit price on the shelf tag. This will tell you the price per ounce or per item. The unit price is the only way to make a true, apples-to-apples comparison.
A Hidden Price Hike
Shrinkflation is a very real and a very frustrating phenomenon. It is a deceptive practice that is designed to trick you into paying more for less. It is a hidden price hike that is hiding in plain sight. By learning to spot the subtle tricks that companies use to disguise it, you can become a smarter and more empowered shopper. You can make your decisions based on real value, not on the illusion that the package creates.
What is the most obvious example of shrinkflation that you have ever seen? How does this practice affect your loyalty to a brand? Let us know your thoughts!
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