Shrinkflation

We’ve all noticed the impact of the current inflation–7.9 percent for the 12-month period ending in February, which is the highest annual rate since January 1982–at the gas pump, at the grocery store, and in countless other elements of our daily lives. In addition, some observant consumers have noticed that inflation is having a less obvious effect on certain products. The effect isn’t as apparent because it isn’t reflected in the listed price for the product, but in the amount of the product that is being supplied.

In short, we’re not only seeing higher prices, but product shrinkage as well. Some have dubbed the phenomenon “shrinkflation”: it occurs when the consumer pays the same amount as before, but gets less. And because most busy consumers don’t carefully read the disclosures on the products they buy, or notice the weight and size of the packaging, the effect of “shrinkflation” may have escaped your attention–which is kind of the goal of the manufacturers that use this tactic. (Of course, this option isn’t available for products that are sold in standard sizes, such as a gallon of gas; imagine the reaction if you went to the pump and saw that the listed price was for a quart of gas, rather than a gallon.)

The article linked in the last paragraph provides examples of shrinkflation that occurred in 2021 in products as diverse as paper towels, toothpaste, and snack chips. A bag of Doritos, for example, went from 9.75 ounces to 9.25 ounces, which amounts to five fewer chips than the price bought before. The article quotes a representative of Frito-Lay, which makes Doritos, as explaining: “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.”

There’s nothing intrinsically wrong with this practice; companies are entitled to package their products as they see fit. As long as product packaging disclosures are accurate, consumers can figure out that they are getting less than they used to for the same price. But the practice of “shrinkflation” shows that inflation can get you in two ways: you can pay more, or you can get less. It’s also a good reason to pay attention to the packaging of what you buy.

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