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Tuesday's 2-Minute Tip

June 28, 2022
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Term to know: Shrinkflation

Stories about inflation are not just front-page news, but every-page news. From housing to transportation to retail, and everything in between, consumers and reporters alike can feel the tightening of their budgets. One hidden aspect of inflation that gets less attention is a concept referred to as ‘shrinkflation.’ So let’s talk about what it is and what to look out for in your reporting.

What is shrinkflation?

The first use of this portmanteau is credited to Pippa Malmgren, a British economist, who noted this increasing occurrence of companies reducing the size of their products, while not reducing the cost to the consumer. For example, that 20oz box of cereal is now only 18oz but still costs the same on the shelf. 

Shrinkflation allows corporations to boost their profitability without losing out on sales volume because they are able to fight their own rising costs without making price hikes that most consumers would immediately notice. Instead, companies choose to reduce the size of a product because consumers are less likely to notice the difference. Reducing the size of a bottle of shampoo by even half an ounce can save a lot of money for a company and as long as someone isn’t tracking the old packaging, who would be the wiser? As Edgar Dworsky, a consumer advocate, put it: “consumers tend to be price conscious. But they’re not net-weight conscious.” 

It is important for reporters to note that shrinkflation is not the same thing as fraud. It isn’t required for companies to report to consumers when they make a change to the size of their product, nor are they bound by their past decisions. There is nothing illegal about shrinkflation, it is just a way of cutting costs without ending up in the news for hiking prices on America’s favorite products.

Examples of shrinkflation beyond packaging

Shrinkflation isn’t just confined to product size in packaging on store shelves or net weight, it can also be found in other ways: 

  • Restaurants may reduce portion sizes on their menus, such as one less dumpling on the appetizer plate.
  • Cookie-makers may use fewer chocolate chips per cookie.
  • Toilet paper rolls may have the same amount of sheets, but the actual width of each sheet is now a ½ inch smaller.

Why it’s important to know

The problem with shrinkflation is that it can be harder for consumers, and reporters, to track. Dworsky’s website, MousePrint, attempts to track when companies use shrinkflation to keep consumers informed. New additions were added this month including Cocoa Pebbles, Charmin Super Mega Toilet Paper, and Pedigree dog food. 

It clearly isn’t impossible to track shrinkflation and companies can’t do it over and over without people eventually noticing, but it can save the company’s profit margins for quite some time before people start to get upset about it.

The major problem for corporations that use shrinkflation is consumer sentiment about the brand. People tend to feel cheated when they discover their products are no longer as good as they once were. Plenty of companies have used PR to spin stories of shrinkflation as a positive or not related to profit margins, such as Folgers stating the lower net weight in their coffee is due to new technology that creates lighter-weight beans or PepsiCo saying the new tapered Gatorade bottles were to make them easier to hold and they had been developing them for years. Though as the LA Times noted, PepsiCo did not respond to why the new 28oz bottle was more expensive than the original 32oz.

So when you’re reporting on inflation in your beat, make sure you’re not just asking about how the price of goods has changed, but also on the quality and size of that product, while also taking into account corporate PR and how that affects consumer sentiment. It’s a reporter’s job to keep consumers informed and corporations honest.

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