How to Defeat Inflation’s Sneaky Twin – Shrinkflation
You may have noticed prices at your local grocery store or big box retailer rising lately. The Consumer Price Index for June, released today, showed the biggest 12-month jump since August 2008. The 0.9% increase in June was also the largest one-month change since June 2008, GOBankingRates reports.
But if prices of some of your favorite brand-name items haven’t gone up — look closely. The amount you’re purchasing inside that package could be shrinking instead. In a trend economic experts are calling “shrinkflation,” manufacturers are reducing the amount of product within packages rather than increasing the sale price.
“The conventional wisdom is that an explicit price increase might be noticed by consumers and they might react negatively to it, but a small decrease in size might not be as observable,” said Bureau of Labor Statistics economist Steve Reed in a news report by ABC News.
Which Brands Have Shrunk Their Offerings?
LenPenzo.com, a personal finance blogger, shared a list of more than 20 household and grocery items now being sold in smaller packages for the same price since January 2020. Among them were Lay’s Potato Chips, where a “party bag” used to be 15.25 ounces and is now just 13 oz., and Bounty 2-ply paper towels, which used to contain 138 half-sheets and now offers just 110 half-sheets in a roll. Nathan’s hot dogs, which used to come in packages of 16 now come in packs of 14.
It’s a sneakier way of raising prices, as consumers may remember the retail price of their favorite items but may not pay attention to the size of the package. And you won’t see an increase in your grocery bill, although you might notice that you run out of your favorite items more frequently, due to the smaller package sizes.
However, for companies, the cost savings adds up. “Think from the Frito-Lay standpoint,” says Edgar Dworsky, a watchdog at ConsumerWorld.org.
“If [Frito-Lay] save[s] half an ounce on every bag, multiply that times the tens of millions of bags [sold], that’s a big savings for them,” he said.
Frito-Lay is the manufacturer of Lay’s chips, as well as Doritos and Wheat Thins, both products having also decreased package sizes in 2020, according to a segment on Good Morning America, which featured Dworsky discussing shrinkflation.
Combat Shrinkflation By Being a Savvy Shopper
Fortunately, there are ways savvy shoppers can combat “shrinkflation.”
First, compare the “unit price” of different items, which offers a better way to compare what you’re really getting for your money.
Also, don’t rely on memory. To combat future shrinkflation, write down the retail prices and package sizes of your favorite items and go-to brands. Then, you can more easily compare next time you shop. You may not be able to do anything about shrinking product sizes, but you may be able to look for alternative items that give you more for your money.
While some store brands, such as Kirkland, have been guilty of shrinkflation, according to LenPenzo.com, many have kept package sizes and prices the same in the past year. Consider store brands to shave even more money off your grocery bills.
Also, turn to fresh produce from stores like Lidl and Aldi or even your local farm stands or food co-ops. By avoiding prepackaged foods, you may find that you and your family can save money and eat healthier, too.
Finally, don’t be afraid to dig on the shelves or check end-caps at stores. You may spot some older merchandise with a larger package size for the same price as boxes that are new to the shelves.
Being prepared for, and aware of, change — whether that’s inflation, shrinkflation or even positive changes like freebies and sales — is a good way to stay on top of your finances, save money and put yourself in a better position for the future.
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