Shrinkflation
As the effects of the COVID-19 pandemic continue, you certainly have noticed an increase in the cost of a lot of goods and services. Inflation is a topic on every media channel as it continues to rise. In fact, according to US Bureau of Labor Statistics (BLS), inflation surged by 7.5% between January 2021 and January 2022. This was the largest increase of over a 12-month period since 1982!1 Thanks to inflation, ingredients and labor costs are now more expensive and thus higher prices are easily noticeable at grocery stores, gas pumps, home improvement services, etc. If companies cannot cut costs, they must resort to raising prices OR make their products/portions smaller. Enter Shrinkflation.
The practice of shrinkflation is where a company reduces the
size of a packaged good but sells it for close to the same price. So, while the
price may not increase much, consumers are likely not getting the same amount
of a product as in the past. By practicing shrinkflation, companies can avoid
an easily noticeable price hike. For example, what if your favorite item was
$3.50 per unit and it suddenly increases noticeably to $5 per unit? It is
likely you would begin searching for alternative brands or cease buying it altogether.
But what if the price remained close to $3.50 per unit, but you received 10-20%
less? Look at a few examples: Kirkland brand paper towels at Costco was 96.2
sq. ft., but now at 85 sq. ft. A six-count nugget pack Chick-fil-A is now a
five-count nugget pack. Ivory dish soap is now 24 oz. instead of 30 oz. Your
favorite cereal may have received a bigger box, but less contents inside for
consumption.
You can deal with shrinkflation by paying closer attention
to the everyday items you buy and their price per unit instead of the overall
price. If your favorite item is the same price as the store brand, but the
store brand gives you a little extra to enjoy, then that might be the better
buy. Consider becoming even more judicious about waiting for sales. If you are
now getting fewer items for your money, you may want to wait until they are available
for less at your local grocery store. Lastly, consider buying staple items in
bulk. The price may be a lot less per ounce or unit than when they are
purchased in smaller batches. A word of caution when purchasing in bulk: don't
buy so much that you are unable to use it all prior to expiration, as you may
end up throwing away your savings.
1 https://www.bls.gov/news.release/pdf/cpi.pdf
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