Shrinkflation is Real

Posted on Friday 30 July 2021

Shrinkflation is Real

How often do you pay attention to the quantities or weights of your grocery staples? When’s the last time you checked the packaging to see how many ounces you’re actually getting? Over time, as inflation occurs, you may be getting less and less due to shrinkflation.

If you’re not in the habit of reading the packaging, now’s the time to start. Shrinkflation is on the rise, and you could be getting ripped off without even knowing it. Paper goods like toilet paper and paper towels are easy targets for unsuspecting consumers; so are household groceries, including cereal, milk, and even hotdogs. Even if you are aware of the best payday loans out there, it's best to roll back a bit.

It’s why General Mills has decreased the weight of their “Family Size” cereal boxes (and their box depth, too). If you think your box of cereal is getting taller and thinner, it’s not your eyes playing tricks on you – shrinkflation is probably to blame.

But what is shrinkflation exactly, and why does it happen? As consumers, we don’t have much control over shrinkflation – but knowing about it can help you make smarter choices with your monthly shopping budget. In the sections below, we’ll tell you everything you need to know about shrinkflation to help you conserve your hard-earned cash while shopping for the necessities.

What is shrinkflation?

Shrinkflation happens when a company decreases the size or weight of a product, but keeps the price the same. So instead of paying $4.99 for a 56-ounce carton of ice cream, you might be paying $4.99 for 48 ounces instead.

You’re getting less for your money – which means that company or manufacturer has pulled off a back-door price increase. Sometimes, this increase might come with a transparent explanation, but in the vast majority of cases, it happens without you even knowing it.

How are companies pulling this off? The answer is simple: we tend to look at price first and foremost when making shopping decisions.

While there are certainly some exceptions, the truth is that most of us don’t take the extra time to look at how much we’re actually getting for our money (much less track a product’s weight over time). As Edgar Dworsky, former Massachusetts assistant attorney general, explains:

"Consumers tend to be price conscious. But they're not net-weight conscious. They can tell instantly if they're used to paying $2.99 for a carton of orange juice and that goes up to $3.19. But if the orange juice container goes from 64 ounces to 59 ounces, they're probably not going to notice."

In short: shrinkflation is when you, the consumer, gets ripped off from companies taking advantage of a lack of detail-orientation. Yikes.

Why does shrinkflation happen?

Shrinkflation may not be great from an ethical standpoint, but there are some data-based reasons behind it.

When the cost of materials rises (in other words, inflation), companies and manufacturers have to cut costs somewhere in order to stay profitable. Unfortunately, cutting costs isn’t always possible – particularly if costs are rising due to uncontrollable circumstances, like a pandemic.

If a company can’t cut costs, there are really only two options left: they can either increase costs, or they can decrease the size of their products. From a consumer standpoint, rising costs tend to be frustrating and off-putting, and may cause someone to choose another brand instead.

With that in mind, companies often find that it’s much more consumer-friendly to keep costs consistent and hold onto that brand followership. (This makes good business sense, too, since slightly smaller portions also means that you might need to visit the grocery store sooner than usual.)

Of course, the only way that a company can keep their prices consistent with higher production costs is to change the size or weight of the end product. Even an incremental change in ounces, multiplied by millions of customers, can result in big savings for a manufacturer.

Shrinkflation sometimes means increasing prices, too

In some cases, shrinkflation may even be taken one step further, where a company both decreases the size of their product and raises the price. For example, a roll of Charmin toilet paper used to come with 650 sheets in a roll.

You’d be hard-pressed to find that today without having to pay extra for a “Mega Roll” or a “Super Mega Roll.” In 2015, the standard Charmin roll was 9 percent smaller (think width) and less than 300 sheets. To make matters worse, some rolls have shrunk by as much as 20 percent.

As another example, one consumer noted that a 9.75-ounce bag of Doritos that was the standard size in March had become a 9.25-ounce bag by July. And even in a smaller bag, consumers were paying $0.22 more. It’s shrinkflation at its best: a smaller portion for higher prices, but the changes are incremental enough to fly under the radar.

When shrinkflation continues over time – and when combined with a good marketing campaign – it isn’t hard for consumers to forget that they’re paying more for lesser quantities.

What can consumers do about shrinkflation?

The truth is that shrinkflation isn’t going away any time soon. It was happening before the pandemic, and while it’s certainly a notable event during the pandemic, shrinkflation will stick around long after Covid-19.

Inflation is a natural part of any healthy economy, and when inflation exists, so does shrinkflation. Companies will face ongoing challenges to stay competitive and profitable while inflation rises and falls – and even without increasing production costs, shrinkflation is still a risk-free way to bet that consumers won’t notice they’re getting less for their money.

What can you do to help minimize the effects of shrinkflation? Paying attention to what you’re buying is the best way to ensure that you are fully in the know about when shrinkflation is happening.

Most experts recommend keeping a sharp eye on the fine print for the products you buy most often to track changes in price and weight/quantity over time. Smaller portions are rarely advertised, so that means you’ll need to rely on your own documentation to recognize when a brand or product has changed.

Comparing and contrasting the price and quantity of competing brands can be a helpful benchmark, too. Not only will it help you identify when shrinkflation is happening, but you may find that you’re getting a much better deal overall by simply choosing another brand.

Finally, use the “Family Size” versions as a benchmark for price and quantity. Larger sizes can give you a starting point for how pricing and quantity work in tandem – and can help you spot inconsistencies with smaller sizes across a brand.

As you become more aware of how shrinkflation works, this might be your best opportunity to learn how to better manage your money. If you don’t already have a budgeting system in place, this is a great time to start! Choose the budgeting system that works best for your needs and make sure that you keep shrinkflation in mind.

Not only will a budget keep your financial trains running on time, but it will also ensure that rising costs (and lower quantities) won’t drain your checking account.