How companies are hiding inflation without charging you more

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Do consumers notice when their everyday products get smaller? Often they don’t and companies are taking advantage by reducing the amount of product they sell while keeping prices the same. Shrinking product sizes to pad profits is not a new tactic but it grows in popularity during periods of shortages and inflation. Some consumers are noticing and documenting their shrinking groceries on the shrinkflation subreddit.

Even with today’s release of US inflation figures from the Bureau of Labor Statistics, consumers may not realize they’re paying more for some of their regular purchases because companies are reducing sizes while keeping prices the same.

Downsizing a product while keeping its price the same is sometimes called “shrinkflation”—a combination of the words shrink and inflation. Companies face higher prices for their supplies and may try to pass that onto the consumer. Downsizing a product reduces costs for manufacturers. Shoppers tend to be price-sensitive but they may not notice subtle changes in packaging, or read the fine print on the size or weight of a product. The result is that consumers are less likely to notice getting less if the price is the same.

Quietly downsizing products is legal in the US until the empty space in a company’s packaging no longer serves a purpose. In a bag of chips, the air serves shipping and handling purposes so that the chips don’t break. A bottle of aspirin needs space for machinery to insert and fill the bottle. Downsizing isn’t necessarily easy, and needs to be worth the effort.

Jamie said that shoppers have become more aware of the harm of wasted packaging. “You need to get rid of the oxygen or redesign the packaging.” But creating new packaging requires purchasing the machines to make it. “How many millions do you need to spend on the capital, the design, the supply chain, to make a package slightly smaller? If the commodity price is reversed and everything goes back, you may have wasted your money.”