Shrinkflation: How Manufacturers Hide Price Increases

by Chris Bjorklund

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When is a pound not a pound? That sounds like the beginning of a joke, but the joke is actually on consumers. In this case, a pound of coffee beans recently became 12 ounces instead of 16 ounces, without a price change. And then, the package size went down even further to 10.5 ounces and the price went up! You can find examples of this everywhere—changes in box sizes, ingredients, product labels and container shapes—as manufacturers cut costs and hope consumers won’t notice the hidden costs of inflation.

Products like cereals, paper towels, toilet paper, diapers, margarine, shampoo, crackers, dog food, detergent, sports drinks and lotions have been downsized as documented by the nonprofit group Mouse Print. Consumers can report downsized products by sending photos of the “before and after” net weight or net count. Reports are investigated and name brands are posted if verified. The group uncovers tricks like the one used by a sports drink manufacturer to camouflage a price increase. The bottle stayed the same physical outline, but the contours of the bottle were changed to hold four less ounces of liquid.

So, what can you do about shrinkflation? Savvy shoppers are getting wise to this trend and know how to spot sneaky price increases. First, look for the unit price on the label, not just the package price. (Unit price is the total cost divided by the total number of units of a product.) Other strategies include buying in bulk, buying generic products and abandoning your loyalty to your favorite brands if they’re devaluing their products. Economists say that when consumers think the price for something is too high, they seek out cheaper options. This “substitution effect” decreases sales for the product the more consumers switch to lower-priced brands or similar products, which puts downward pressure on inflation.

Brazil has already taken steps to require manufacturers to label products that have been reduced in net weight or net count. A sticker is prominently displayed on these products for six months to let consumers make informed choices and search for cheaper options. 

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