‘Shrinkflation’ results in reduced package sizes as prices remain same

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Shrinkflation Overview: 

• Who: Companies have increasingly been engaging in “shrinkflation” in order to cut costs in the face of rising inflation rates. 
• Why: Shrinkflation is when a company subtly decreases the amount/size of a product it sells rather than raising its price. 
• Where: Shrinkflation is affecting consumers across the US. 

Companies across the US are increasingly resorting to a tactic called “shrinkflation” as an alternative— and perhaps deceptive—way to reduce costs without having to raise prices for consumers. 

Shrinkflation is when a company, instead of raising the price of a product, shrinks its size before selling it to the public, reports CNET. 

These size changes—which can be small and go unnoticed by the average consumer—can ultimately add up to big savings for businesses at the potential expense of consumer protection. 

Recent examples of shrinkflation include Kleenex reducing the amount of tissues in each box from 65 to 60, and Chobani Flips decreasing the size of its single-serving yogurts from 5.3 ounces to 4.5 ounces, reports the Associated Press. 

The increase in shrinkflation can be traced back to the high rate of inflation in the country, which saw an inflation rate of 8.58% last month. 

The high rate of inflation, meanwhile, has forced companies to spend more for things like ingredients, transportation, and labor, reports the AP. 

Consumer Price Inflation Rose By An Estimated 7% During May 

On a global scale, the AP reports that consumer price inflation rose by an estimated 7% last month, with S&P Global revealing inflation should continue to rise at that same pace through the month of September. 

Shrinkflation, meanwhile, has affected the size of a variety of different products sold to consumers, such as the amount of breakfast cereal per box, sheets of toilet paper per roll, and ounces of coffee per container. 

A company will sometimes choose to engage in shrinkflation rather than increase the price of a product, believing consumers would be discouraged by having to pay more but may be less likely to notice a difference in size, reports the AP.

Target took a different approach to unloading its merchandise earlier this month, when the retail store revealed it would be canceling orders and marking down unwanted inventory in an effort to make room for more desirable items.

Have you purchased a product which has been downsized as a result of shrinkflation? Let us know in the comments! 

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