Ever feel like your paycheck doesn’t stretch as far as it used to? You’re not imagining it. Hidden inflation is silently creeping into your everyday expenses, making your money worth less without you even noticing, and if you don’t act now, it could quietly erode your savings faster than you think.
Shrinkflation Defined:
Can you tell which chocolate bar is the smallest?
You might think it’s number two, but actually numbers two and three are the same size. Both are 25% smaller than number one. But it’s harder to tell with number three, because of how the chocolate has been distributed. It’s this sort of underhand tactic that makes it hard to see product shrinking, which is spreading throughout our supermarket aisles, to everything from toilet roll to Toblerones.
So why are products getting smaller? Actor BJ Novak noticed a classic case of shrinkflation and called out Cadbury’s on TV. The standard version of the egg had clearly shrunk, yet in the FAQs on Cadbury’s website at the time, in answer to why the size had changed, it said, ‘It hasn’t, you’ve just grown up. Shrinkflation has become a widespread economic tactic.
Between 2012 and 2017, 2,529 products shrunk in the UK while staying the same price, and there’s a whole Reddit thread dedicated to tracking these changes. … And I thought £1.50, great, and then look, there is literally not even like a quarter of it filled with chocolate. I put it on top of the other can of soup that I have, and I noticed it was considerably smaller.
Corporate Transparency & Acknowledgment:
After Doritos’ owner, Frito-Lay, was called out, they admitted to reducing the amount of crisps in a bag, saying, ‘We took just a little bit out of the bag, so we can give you the same price and you can keep enjoying your chips.’
Skimpflation (The Hidden Tactic):
There’s another similar tactic called skimpflation that is often used, but harder to track. Where the weight and price of the product stay the same, but the quality of the ingredients decreases. Take Campbell’s cream of potato soup; potato used to be the first ingredient on the list, but now it’s water.
The Corporate Motive: Profits over Price Hikes:
So, why did they do it? Due to inflation, the cost of all the ingredients and resources they use goes up. Then the companies transfer that cost to the consumer. But if they put the prices up, we might notice and opt for a cheaper brand. So, instead, they keep the price the same and recoup their costs by taking back some of the product instead.
A Harvard study proved that people are more sensitive to changes in price than to changes in quantity. And this can be fruitful for companies. In the ’80s, American Airlines removed one olive from each dinner salad served to customers and saved around $40,000 a year.
Profit vs. Inflation:
But shrinkflation isn’t just used to keep up with inflation; companies are raking in the profit. While overall inflation rose by 21% from July 2020 to July 2024, corporate profits grew by 90% over that same period. Nearly four and a half times as fast as inflation. So companies are taking the opportunity to increase profits as much as possible. And when inflation decreases, the products have never returned to their original sizes.
Psychological and Packaging Tricks:
The reason companies can get away with this, and why most of us don’t notice sooner, comes down to psychology and clever packaging tricks. Take toilet paper as one of the boldest examples of shrinkflation. Last year, Walmart quietly reduced the sheets on their Ultra Strong rolls by forty-eight, while UK supermarket Waitrose cut theirs by a fifth. You’d think a drop that big would be obvious. But by tweaking the size of each sheet, putting fewer sheets on the roll, and enlarging the tube, the change went largely unnoticed.
These subtle tricks are what make shrinkflation so sneaky. Companies are counting on the fact that we’re busy, distracted, or just not measuring everything we buy. Take Skippy peanut butter. Two tubs might cost the same, but unless you check the weight, you won’t realize one has eight ounces less. That’s seventeen percent less peanut butter for the same price. They make it look like the jar is the same, but clever molding and packaging do the trick, quietly shrinking the product without setting off alarm bells.
Government and Political Response:
Some governments are cracking down. Last year, France made it compulsory for retailers to notify shoppers of shrinkflation. Other countries have followed suit; however, in a British parliamentary inquiry into fairness in the food supply, politicians justified the practice. There are different motivations for that, but there are also some health benefits in reducing the size of chocolate bars.
Even former US President Joe Biden is fuming about shrinkflation. Some companies are trying to pull a fast one by shrinking the products little by little and hoping you won’t notice.
And this year, the Shrinkflation Prevention Act has been introduced by US Senator Robert Casey, who called the practice greedflation.
Consumer Self-Defense:
So, how can you protect yourself from paying more for less? Firstly, ignore the big product price and instead keep track of the unit price on your favorite products. That’s the price, per serving, per sheet, or per ounce. It’s the best way to tell if you’re getting less bang for your buck.
Secondly, don’t be afraid to call out shrinkflation on social media. People did it with Toblerone when they removed a quarter of the chocolate by increasing the gaps between the triangles. Which they were forced to undo.
Shrinkflation isn’t going away anytime soon, but by being aware of it, you can take your autonomy back and make choices with the full picture.
Conclusion:
Hidden inflation is quietly eating away at your money, from smaller chocolate bars to watered-down soups. By staying aware, checking unit prices, and calling out sneaky tactics, you can protect your wallet and make smarter choices in a world where companies profit while your purchases shrink.
FAQs:
1. What is hidden inflation?
Hidden inflation is when prices stay the same, but product size or quality is reduced.
2. What is shrinkflation?
Shrinkflation is when a product becomes smaller while its price remains unchanged.
3. How does skimpflation differ from shrinkflation?
Skimpflation lowers product quality instead of size, keeping the price and weight the same.
4. Why do companies use shrinkflation?
To maintain profits without raising prices, since consumers notice price hikes more than smaller portions.
5. How can I spot hidden inflation?
Check unit prices per ounce, sheet, or serving, not just the total price.
6. Are there laws against shrinkflation?
Some countries require disclosure, and laws like the US Shrinkflation Prevention Act aim to curb the practice.