News: What Is Shrinkflation, and How Does It Affect You?
Shrinkflation: A sneaky way to charge you more for the same product.
Contributing Writer at Tally
August 27, 2021
Amid the COVID-19 pandemic, inflation has taken hold, as everything — fuel, groceries, cars, clothing and more — continues getting more expensive. In June, the consumer price index (CPI) reached 5.4%, the highest inflation rate we’ve experienced since 2008.
But there’s another economic storm brewing in the background that many people are missing: shrinkflation.
What is shrinkflation?
Shrinkflation is similar to inflation in that it hits consumers in the bank account, but it’s far sneakier.
Suppose you love a particular 2-ounce candy bar, and you buy it every week for $1.50. Suddenly, the price increased to $1.75 one week for that same candy bar. You’d likely notice that rise in price. That’s inflation.
In shrinkflation, the candy bar’s price remains the same at $1.50, but it’s now a 1.71-ounce candy bar. So, instead of raising the price, the company shrunk the candy bar, hoping you wouldn’t notice the 0.29-ounce reduction — and you likely didn’t.
While you may not have noticed the change in shrinkflation, the result is the same. The company increased the candy bar’s price per ounce from 75 cents to about 87 cents.
In the case of items that you know the size or weight of, like milk, companies can still play the shrinkflation game. A dairy company offers gallons, half gallons and quarts of milk, and the smaller quantities almost always cost more per ounce.
Now, milk is so common that we all know its volume, so the companies can’t suddenly start sending 0.75 gallons and charging us the same as a whole gallon. However, they can simply produce fewer gallon containers and increase the number of half gallons. If the store is out of gallons of milk, most consumers will just pick up a half-gallon or quart instead.
How to spot shrinkflation
Shrinkflation can create havoc in your monthly budget, and you may never quite know why your dollar isn’t stretching as far without first changing the way you shop.
Instead of shopping by the total price, switch to shopping per ounce. At first, you may struggle with remembering pricing trends, but over time, you’ll get used to this shopping method and be able to spot shrinkflation and inflation as it happens.
Don’t worry about bringing a calculator along on your grocery trips to do the math. Many grocery stores already put the per-unit price — per ounce, per gram, per piece, per pound — on the price tag on the shelf.
How to fight shrinkflation
You can restore the buying power of your dollar by fighting shrinkflation. Here are a few ways to combat these sneaky price hikes:
Buying in bulk
Everything usually is significantly cheaper in bulk, so stock up on items you regularly use. This may cost you more out of pocket up front, but you’ll save in the long run.
A few warnings about buying in bulkensure: first, make sure you have the appropriate storage space for your bulk purchases. You won’t benefit from buying the jumbo pack of hamburger patties if you lack the freezer room for them.
Second, check the expiration date. If the bulk item you bought expires before you can eat it, you’ll be throwing away money.
Keep an eye out for coupons and sales at the grocery store, and stock up during these times. Sure, you may be letting the grocery store dictate your weekly dinner menu, but the savings will make up for that.
Forgetting brand loyalty
Don’t let brand familiarity or loyalty cost you. If the brand-name macaroni and cheese just went up 15 cents per ounce, consider switching to the store brand instead.
Don’t let shrinkflation “shrink” your dollar
As a consumer, you have little control over what big corporations charge for their items, but you can hit them right back in their wallets by understanding the pricing games they play.
If you focus on things like per-ounce pricing, buying in bulk, shopping during sales, and switching up your brands, you can keep your dollars stretching as far as possible.