Manufacturers use ‘shrinkflation’ to pass costs on to consumers

With inflation at a 40-year high in the U.S., we are all spending more when we go to the store. But there is another dimension of inflation these days called "shrinkflation." Economics correspondent Paul Solman explains.

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  • Judy Woodruff:

    With inflation at a 40-year high in the U.S., we are all spending more when we go to the store.

    But economics correspondent Paul Solman reports that there is another dimension of inflation these days, shrinkflation.

    We will let him explain.

  • Paul Solman:

    So, what is this, the rogue's gallery of shrinkflation or…

    (LAUGHTER)

  • Edgar Dworsky, Consumer World:

    These are some of the newer items.

  • Paul Solman:

    In fact, items consumer advocate and lawyer Edgar Dworsky had bought in just the past week.

  • Edgar Dworsky:

    The first one here is kind of an egregious example, Angel Soft toilet paper. Used to have 425 sheets on a roll. The new one has 320.

  • Paul Solman:

    Wow. That's 25 percent.

  • Edgar Dworsky:

    So, you're — right. It's almost two full rolls in the new sizing. But look at the packages. Don't they look almost identical?

  • Paul Solman:

    Do they ever.

    And that's the key to what's being called shrinkflation, says Dworsky, who writes the online Consumer World newsletter and has been tracking product downsizing for decades.

  • Edgar Dworsky:

    I remember the Charmin of the 1960s, when Mr. Whipple came on TV.

  • Actor:

    I told them, squeeze the tomatoes, squeeze the melons, but please don't squeeze the Charmin.

  • Edgar Dworsky:

    And it had 650 sheets on a roll. The biggest one today has 366. It's about 90 percent less.

  • Paul Solman:

    And it's not just toilet paper. Ice cream tubs used to be a half-gallon, two quarts, then one-and-three-quarters quarts. They have now trimmed down to a svelte one-and-a-half, because, lately, it's been the incredible shrinking everything.

  • Edgar Dworsky:

    Shrinkflation tends to come in waves. We happen to be in the middle of a tidal wave at the moment because of inflation.

  • Paul Solman:

    That's because material and transportation costs have been soaring since the much-reported supply chain snags. How best to pass them on to us consumers?

  • Edgar Dworsky:

    Manufacturers rely on both raising the price and shrinking the product. The difference is, they know that consumers are price-conscious and consumers will catch the fact if that container of orange juice went from $2.99 to $3.39, and they will balk, they will complain. Maybe they will switch to another brand.

    But they know consumers are not net weight conscious. They're not going to notice, most of them, if the product has gotten a little bit smaller.

  • Paul Solman:

    Especially not if the shrinkage is pretty much indiscernible.

    What is that, dishwashing detergent?

  • Edgar Dworsky:

    Well, this is Dawn. The current seven ounce little bottle is now 6.5 ounces. So you lost half-an-ounce. Honest to goodness, I don't know how they did it. But just know the bottom line is, you are getting half-an-ounce less.

    Here is Post's Honey Bunches of Oats. The old one was 14.5 ounces. The new one is 12 ounces. So, look at the boxes. They look identical straight on. But you have got 17 percent less. That translates into two fewer bowls in the new box. And the price was the same.

  • Paul Solman:

    Now, the official inflation rate is 9.1 percent, the Honey Bunches rate, 17 percent. No wonder corporations are posting record profits. They can raise prices above the overall inflation rate, and we won't even notice.

  • Edgar Dworsky:

    Gatorade, forever, it's come in 32-ounce bottles.

  • Paul Solman:

    Yes.

  • Edgar Dworsky:

    The new one is 28. So you lost four ounces in every one. But you look at them, you say, they look — they're the same height. What did they do?

  • Paul Solman:

    Oh, they squeezed the midriff.

  • Edgar Dworsky:

    They gave it a waistline. That's exactly right. And the company says, oh, now it's easier to hold.

    Well, thank you very much. I'd rather have the extra four ounces, and I will suffer holding the old one.

  • Paul Solman:

    And companies also rejigger the products themselves.

  • Edgar Dworsky:

    Folgers ground coffee recently reformulated. They said they fluffed up the beans, so they could no longer put 51 ounces of ground coffee into their canisters. They could only fit in 43.5 ounces. But they're still claiming it makes up to 400 cups with half-a-pound less of coffee.

    You will have to decide, as a coffee drinker, is it still the same cup that you used to get?

  • Paul Solman:

    So, the onus is on the consumer to be hypervigilant, says Dworsky.

    In a supermarket, there's that unit price for everything, right?

  • Edgar Dworsky:

    I don't know the statistics of usage of unit pricing. My sense is, it's very low.

  • Paul Solman:

    Moreover, says the self-proclaimed Mr. Consumer:

  • Edgar Dworsky:

    Where unit pricing doesn't help is when the individual product changes. So, unless you have memorized that your Keebler cookies were 14.3 cents an ounce, and now it's 16.7 cents an ounce, it's not going to help you.

  • Paul Solman:

    Right. I would be totally overmatched.

  • Edgar Dworsky:

    I mean, it's bad enough that I try to counsel people, look at the net weight, the net count, memorize it. And when you go back to the store, double check that it hasn't changed. How else are you going to make a choice intelligently if you don't know what it used to be?

  • Paul Solman:

    Yes, but that's almost impossible. Who's going to keep track of things like that?

  • Edgar Dworsky:

    Here.

    (LAUGHTER)

  • Paul Solman:

    Yes. But you are either a professional or a lunatic.

    (LAUGHTER)

  • Edgar Dworsky:

    Right.

  • Paul Solman:

    Or both.

  • Edgar Dworsky:

    Or a little bit, a little bit of both.

  • Paul Solman:

    Meanwhile, for the rest of us, inflation at the store these days turns out to be even more pronounced than we realize, because of shrinkflation.

    For the "PBS NewsHour," Paul Solman.

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