What Is Shrinkflation—and How Does It Affect Your Grocery Budget?
Amy Fontinelle - Thursday
We all know it by now—the pandemic has caused things to get more expensive. Producers are paying more for energy, labor and transportation, and they're passing the cost on to consumers. 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. 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 and whey protein.
The Consumer Price Index may not even reflect all these shifts: It doesn't adjust food prices for changes in quality the way it does for some other items, such as clothing, appliances and phones. The CPI does normally account for changes in product size, but Bureau of Labor Statistics economist Jonathan Church admitted to the Washington Post in 2021 that pandemic restrictions had impacted the bureau's ability to track changing weights. That means it's become harder than ever to save money on groceries.
Why do companies use shrinkflation?
Shrinkflation is nothing new: Companies have used the practice for decades to offset rising production costs, but it didn't always have such a catchy name. Pippa Malmgren, PhD, economist, author and former White House advisor, is credited with coining the term as we use it today. She uses it in her 2015 book, Signals: How Everyday Signs Can Help Us Navigate the World's Turbulent Economy, and in interviews in 2014.
Malmgren has said shrinkflation (formerly known as downsizing) can be a precursor to rising prices—which certainly feels like the case in 2022, when the term has been used to incite curiosity and alarm in headline after headline. Consumers have noticed thinner toilet paper rolls, shorter deodorant sticks and airier chip bags. Seemingly, no product is immune, not even pet food.
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https://www.msn.com/en-us/lifestyle/lifestylebuzz/what-is-shrinkflation-and-how-does-it-affect-your-grocery-budget/ar-AAZynwI