The other day, I bought a certain food product. An otherwise tasty bag of chips from a certain brand of which, for obvious legal consequences, I’ll refrain from putting on blast. Aside from the delicious mid-afternoon snack, I couldn’t help but notice the obvious “shrinkage” of the contents.
And it wasn’t one of those “it’s only smaller because you’re comparing it to when you were a child.” This particular bag was noticeably smaller than prior purchases. The respective brand clearly shrunk the product. The culprit: shrinkflation.
Shrinkflation is what happens when you get less of a particular item, like a bag of chips, for the same price or even a bit more. The company packages the product in the same or nearly the same way, but reduces the content(s) while maintaining the price, or in some cases, raising it slightly. Such economic developments can be devastating for America’s consumers, especially during the Christmas holidays. Food prices immediately come to mind when it comes to shrinkflation, but the phenomenon can affect consumers in any number of product verticals.
According to findings by CNBC, 49 percent of consumers say they purchased a different brand, while 48 percent say they opted for a generic brand over a name brand, while 33 percent chose to purchase in bulk rather than smaller packages. Some shoppers have reportedly stopped buying specific brands altogether, researched alternatives that are not impacted by shrinkflation, or even returned a shrunken item.
“Rising gas prices are obvious, but at the grocery store, shrinkflation can look like products with suspiciously smaller amounts selling for the same price as before,” says Amy Fontinelle, personal finance journalist, in a recent Reader’s Digest piece. “Or the products themselves might be changing – the milk, cream, and sugar in your favorite ice cream might be replaced with cost-saving bulking agents like corn syrup solids or whey protein.”
Shrinkflation is not new to corporate America’s operational or manufacturing habits or principles; Companies have employed the practice for decades in order to offset production costs. For consumers, however, having to compensate for shrinkflation in addition to enduring the lasting effects of the pandemic and continued supply chain issues is simply too much, especially when you have to find a way to budget for the coming Christmas season.
What are the forces that create shrinkflation?
Inflation and existing supply chain challenges continue to devastate the U.S. and the worldwide economy while corporations’ manufacturing costs are still experiencing an upward trajectory. In many cases, they’re not raising their prices so much as shrinking their respective products.
By doing this, the companies can still sell their products at the same price but they’re saving costs on manufacturing smaller portions.
It is completely understandable that consumers – particularly low-income communities whose household dollar only goes so far – would feel a certain way about that; bringing their usual food purchases home from the grocery store, opening them up and realizing this new iteration of the product doesn’t have the “heft” it once did.
And it’s completely legal, as long as the company clearly indicates a precise weight to which customers can compare with the overall price, or until the empty space in the company’s packaging no longer serves a purpose. The following examples by Forbes and BuzzFeed are everyday products that have already been affected by shrinkflation:
- Cottonelle mega-roll toilet paper used to feature 340 sheets a roll, now down to 312
- A box of family size Corn Flakes is now roughly 21 percent smaller, from 760 grams to 600
- Bags of Doritos shrunk from 9.75 ounces to 9.25 ounces
- A bottle of Aleve went from 100 caplets to 90 caplets
- Simply Lemonade, among other juices, has gone from 64 ounces to 59 ounces to 52 ounces while the price has remained the same
I could go on. There’s plenty of examples to choose from. In response, a Frito-Lay representative told Quartz while rationalizing Doritos’s shrinkflation in 2021: “We took just a little out of the bag so we can give you the same price and you can keep enjoying your chips.”
Not for nothing, Frito-Lay reported a 12.9 percent revenue growth in 2021 and expects a six percent revenue growth in 2022.
Not exactly the response households like to hear.
How shrinkflation affects families’ Christmas season and what they can do about it
If you’re not looking for it, shrinkflation may not be noticeable at first. A certain number of chips missing from your bag of Cool Ranch Doritos may not matter to you.
The point of all this is that consumers – some a lot less laissez-faire about their their almighty dollar, especially during the Christmas holiday season – are intimately aware that they’re paying the same price for less of a return; an often infuriating reality for consumers still smarting from the sting of increased costs from this year’s inflation crisis due to numerous factors.
Here are some tips for advising your credit union members how to keep their money in check during Christmas and stop paying more for less:
Plan ahead for your shopping experience
Impulse shopping can set your shopping budget back in a number of unfortunate ways. “Shoppers should do everything they can to avoid impulse purchases,” advises Kevin Payne in Amy Fontinelle’s Reader’s Digest article. “The best way to do this is to meal-plan each week. That way, you’re only shopping for what you need.”
- Prioritize Christmas shopping lists
Certain products or items are necessary for covering the essentials for your family’s holiday experience. Others, not so much. Shop with a plan that focuses your budget toward holiday staples that your family can’t go without. It is the holidays, however. Don’t cut the fun parts completely out of the picture. Perhaps cut out unnecessary products for comparable ones that are on sale.
- Convenient and fast small dollar loans
It has become an annual campaign of financial preservation for millions of consumers in figuring out how they’re going to afford the various expenses necessary to give their families a memorable Christmas, and responsible small dollar loans from one’s local credit union represent one of the most secure and stabilizing options there is in the financial services industry.
Not only are they becoming more affordable through the credit union movement, but they are possible because digital fintech is becoming so prevalent, available, and affordable for credit unions versus the research and development costs it takes to manufacture their own. When it takes almost no time for a member to go to their phone and apply and receive funding for a loan within 60 seconds, it’s really a no-brainer. Small dollar loans are entering a new era for the credit union movement.
- Ever use coupons?
The great thing about coupons is they aren’t complicated. A straight-forward concept, the customer doesn’t have to spend hours figuring out how they can save .50 cents on a particular grocery item for Christmas dinner.
Consult the grocery store’s mobile app to look for specials and the manufacturer’s coupons for any items on your list. If convenient, stop by two nearby grocery stores if it means it will save needed dollars. Staying on top of grocery stores’ mobile apps is the way one woman manages to save $4,800 on groceries every year.
- Track your spending efforts
Ever had those years when throughout the month of December you just spurge, not even remotely considering your budget and what you’re spending it on? Future you has some advice: Don’t do that again. Track how you’re spending your money so you don’t overspend and destroy this budget and your budget going into the new year.
- Develop a gift-giving philosophy
What does gift-giving mean to you? Does it entail giving the perfect gifts to the right people? Do you hope to impress people with how much you spend on them? Do you feel “obligated” to offer gifts to anyone and everyone?
Be honest with yourself and your motivations, especially during difficult financial periods, why you’re buying gifts before you consider how you’re going to pay for them all.
- Use your credit card rewards program
When was the last time you actually looked at your credit card rewards program? “If you shop with credit cards, find one that rewards grocery store spending,” says Kevin Payne. “It won’t save you money up front, but you can recoup some of the cost through cash back or travel rewards.”
For consumers to get the most out of such programs, they need to be in the habit of paying off their credit card on time, in full, and not carrying a balance. If they don’t, the credit card’s interest charges often outweigh the rewards. Also, consumers need to make sure which grocery retailers your credit card issuer considers grocery stores.
Shrinkflation can be an infuriating concept to accept as a consumer, and corporations deserve to hear about it. With the actions listed above and more, consumers can learn to lessen shrinkflation’s effects on their budgets, save money in challenging times, and become a consistently savvy consumer in the long run.
