Let's Break It Down - Shrinkflation

Introduction

Have you ever opened a bag of chips and felt like there was more air than chips? You might not be imagining it. Many companies have been quietly shrinking their products while keeping prices the same. This is called shrinkflation.

What Is Shrinkflation?

Shrinkflation happens when a product gets smaller, but its price stays the same or even rises. A cereal box might go from 18 ounces to 16 ounces, or a candy bar might lose a few grams. Because the packaging looks similar, many shoppers do not notice.

Why Companies Do It

When the costs of ingredients, packaging, and transportation rise, companies need to protect their profits. Raising prices directly can upset customers, while shrinking products is less obvious. Shrinkflation became especially common during the high inflation of 2021 to 2023, when many brands reduced package sizes.

How to Spot It

The best defense is checking the unit price, which shows the cost per ounce, pound, or item. Comparing unit prices helps you see the real value. Paying attention to package sizes and comparing store brands can also help you get more for your money. Some countries have considered requiring stores to label products that have shrunk.

Conclusion

Shrinkflation is a sneaky form of inflation hiding in plain sight. Now that you know about it, you will be a sharper shopper every time you hit the store!