What Is Shrinkflation and How Does It Impact Shoppers?
Call it inflation’s sneaky twin. Shrinkflation, a practice meant to disguise inflation, is currently trending in grocery stores nationwide.
The average consumer may not have the best understanding about this phenomenon, aside from feeling frustrated that their favorite cookie brand looks, and feels, a lot smaller and lighter than usual. Here’s what consumers need to know about shrinkflation, the specific offerings it impacts, and purchasing decisions to make when a beloved product is downsized.
What Is Shrinkflation?
National retail expert Brett Rose is the founder and CEO of United National Consumer Suppliers, an international wholesale distribution company that provides products to Macy’s, Ross Stores, TJX Companies and Dollar Tree.
Rose said shrinkflation is often used as an alternative to raising prices in line with market inflation or due to rising production costs. Consumers will likely become aware when brands raise their prices. Shrinkflation downsizes the packaging and products. This means everyday products shrink in size or quantity while their prices remain the same.
In some cases, shrinkflation may require reformulating offerings or reducing quality. As a whole, however, it is usually less obvious to consumers than that of a price hike.
“It’s a shrink gun for companies,” said Rose.
While the most recent round of shrinkflation is likely driven by inflation, Stacy Mastrolia, associate professor of accounting at the Freeman College of Management at Bucknell University, said it’s not a new phenomenon.
“When inventory costs are rising, a company has two primary choices to maintain profitability and survival. They can raise prices to pass on the increased costs or reduce the amount of product sold at the same price,” said Mastrolia.
Mastrolia uses the example of a can of coffee. Years ago, consumers could buy a can of coffee that weighed a full pound. Over the years, many products like coffee have experienced shrinkflation when companies want to maintain or improve profitability without raising prices to consumers.
The Impact of Shrinkflation on Products and Packaging
Consumer goods are generally impacted by shrinkflation. Some items are shrunk by a few ounces including body wash containers, toothpaste tubes, ice cream cartons, chocolate sauce bottles and jars of peanut butter. Bottled beverages and soda may decrease in size from two liters to one liter. Paper goods like toilet paper and paper towels, unable to shrink by the ounce, may shrink by packaging fewer rolls or sheets per roll.
Product packaging is also up for grabs in shrinkflation. Mastrolia said companies may enlist the assistance of marketing teams for design changes to product packaging.
“Common product packaging modifications include hollowed bottoms, curved sides and changed shapes,” said Mastrolia.
The end result of these modifications is less product in the new packaging than there was in the previous packaging. Clever copy may utilize adjectives like “new,” “improved,” “exciting” or “better” on packaging to ensure consumers still believe the product quantity is the same as it previously was.
How Can Consumers Combat Shrinkflation?
Savvy shoppers can combat shrinkflation, even on their favorite brands, by following these suggestions.
Do the Math
It’s time to crunch numbers — only this time you’ll want to use unit pricing to do it.
“Because manufacturers are using shrinkflation and increased pricing at different rates, it can really pay off for the customer to compare the cost per unit among competing brands,” said Mastrolia.
This is not too complicated to do either. Mastrolia said with a couple of taps on a phone calculator, consumers can compare the cost per ounce, pound, gram or liter among brands to find the best value for your family.
“Making purchase decisions using unit pricing to determine the best deal when evaluating different packaging designs is the best way consumers can bypass shrinkflation and save,” said Rose.
Purchase Less Pre-Packaged Foods
Rose said foods that are not pre-packaged, like a dozen eggs, a head of lettuce or a single orange, are not as susceptible to shrinkage. As such, any price increases will be more evident.
Buy in Bulk
“Another option, if your family’s budget can afford it, is to buy in larger quantities,” said Mastrolia. “That also lowers the cost per unit.”
Stock Up When There’s a Sale
A significant sale is worth stocking up on your favorite items. Review the clearance bin aisles to see if there are any other discounted goods where you can score a great deal.
If your favorite product has downsized, it’s time to shop around. Consumers may consider visiting competitors to their usual grocery store chain.
They may also look into purchasing store brands over name brands. Rose said store brands are often the last products to experience shrinkflation and may be able to offer a few ounces more of exactly what you need.
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