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October 18, 2021

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‘Shrinkflation’ gives less bang for your buck

More air in that bag of chips? Fewer flakes in your cereal box? You’re not imagining it: “Shrinkflation,” a tactic used by industry to hide price increases, is back in vogue.

Facing the post-pandemic inflationary surge, partly fueled by bottlenecks in global supply and trouble finding workers, companies are under more pressure to deal with rising costs.

Consumer advocate Edgar Dworsky, who has followed the phenomenon he calls downsizing for quarter of a century, says he has identified dozens of products in recent months that have seen sneaky price increases.

He found goods ranging from Charmin toilet paper rolls to Cheerios cereal, to Royal Canin canned cat food, where the size or weight has shrunk, but the price remains the same.

In September, food giant General Mills, maker of Cheerios, flagged the soaring costs for materials and labor to justify conventional price increases but also changes to “PPA” — price pack architecture — a technical term for the adjustment of size or quantities.

While these small changes in size could pass largely unnoticed in the past, the Internet era puts them in the spotlight.

On the social network Reddit, the “Shrinkflation” group has 14,500 members, who share their discoveries although though mostly tongue-in-cheek rather than to protest.

“It’s definitely more insidious because shrinkage, at least for me, is less noticeable than a price increase,” said Jonathan Khoo, 44, a software designer in Oregon.

But “it’s the delay in finding out that you’ve been played” that makes the tactic “much worse” than a straightforward price hike, he said.

Pierre Chandon, professor of marketing at the Sorbonne University’s INSEAD behavioral lab, said shoppers feel they have been scammed because “most consumers have a mistaken idea that the quantities are standardized, regulated,” which is only true for a few rare exceptions like alcohol.

“Since we assume that the weight is fixed, we do not look at it,” Chandon said.

Fellow Oregon resident Brian Johnson winced when he recently saw that a container of trendy local ice cream brand Tillamook dropped from1.65 liters to 1.42.

“I know that companies are doing this because consumers have a price point for items based on years of experience,” the 52-year-old data scientist said.

“They expect to buy a container of something within a price range.”

Dworsky, known as “Mr Consumer,” said companies “don’t take a step like that lightly.”

“They did the calculation” and if they get a handful of complaints “they send a couple of bucks in coupons to the consumer to get them to keep buying.”

In fact there are no documented examples of shoppers revolting against a product that has shrunk.

And even the members of the Reddit group hardly ever call for a boycott of a brand.

“Perhaps we have learned that this is normal and that if we are fooled, it is because we have been bad shoppers,” Chandon explained.


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