By Emma Nitzsche
Consumers have been on high alert for inflated prices, with the costs of homes, cars, and food soaring. But savvy shoppers should also be on the lookout for companies incorporating ‘shrinkflation’— the practice of reducing the size or quantity of products while keeping the price constant.
Economists say shrinkflation occurs when there is an economic downturn and shoppers are more mindful of costs. Sometimes, shrinking products come with appeals like lower calories or environmentally friendly packaging. Some companies even advertise larger packaging but fail to acknowledge that the new size was more expensive on a unit-price level.
According to Jonathan Church, an economist with the consumer price index program at the Bureau of Labor Statistics, the government inflation data reflects the slimmed-down product sizes.
For example, Walmart’s Great Value paper towels went from 168 2-ply sheets per roll to 120. Despite the 30 percent drop in product size, the price remained the same. Hershey’s Kisses reduced their packaging by about 2 ounces from the original 18-ounce packs of its dark chocolate Kisses. The price remained the same, and the company masked the reduction in size by advertising a resealable package.
Tillamook Country Creamery Association, an ice cream company based in Oregon, reduced its family-sized containers of ice cream from 56 ounces to 48 ounces earlier this year. Despite the size reduction, the price remained at about $6. Tillamook CEO Patrick Cristeser said Tillamook had been preparing for the deduction for a year and a half. Recently, costs have risen, including manufacturing and freight, labor and benefits, and ingredients.
“Downsizing is a really sneaky price increase,” said Edgar Dworksy, former Massachusetts assistant attorney general and longtime consumer advocate. “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 that goes up to $3.19. But the orange juice container goes from 64 ounces to 59 ounces, they’re probably not going to notice.”
Product downsizing comes as Wall Street is on high alert for signs of sustained inflation.
Consumer prices rose 4.2 percent more this year, according to the government’s consumer price index. Last week, Costco executives said they were paying more for their inventory. CEO Richard Galanti said the warehouse chain might have to raise prices on popular items such as the $4.99 rotisserie chicken or the 40-pack bottled water, currently priced at $2.99.