With grocery prices rising, experts say consumers should look out for products that are smaller.
In July, the cost of groceries went up 13.1% compared to last year, according to the Bureau of Labor Statistics' July Consumer Price Index CPI. In addition to tracking prices, the BLS also monitors shrinkflation — when the price of a product stays the same or rises but its package size gets smaller.
According to the BLS, shrinkflation is a type of price increase. Steve Reed, an economist at the BLS, told Yahoo Finance that it is something we track and account for. For example, when looking at the pricing of a 64 ounce orange juice container, we try to price it and it is only 59 oz, maybe it is the same price, but for 59 ounces instead of 64 ounces, that ll be computed as a price increase. Some of the categories where package size changes are seen the most are certain snack types and also household paper products, including your toilet paper, paper towels, Reed said.
Reed said the agency has been tracking the practice for a long time and that the term shrinkflation was coined by British economist Pippa Malmgren about a decade ago. I don't think that's a new phenomenon, it's something that has gone on for a long time. Edgar Dworsky, founder of ConsumerWorld.org, recalls a downsizing as a child.
He said that the Mounds bar used to be 2 ounces, then it went to 1.8 or 1.9. Since the cost to make the treat increased, the company was likely to have three choices: change the ingredients, increase the price, or make it smaller. Dworksy said the company went with making the product smaller because candy machines at the time only accepted nickels.
The reader-submitted shrinking products are featured on Dworsky's other site, mouseprint.com. One example is the size of a jar of Utz Pretzels UTZ, once 28 ounces, now only 26 ounces. Another example is the size of Quaker Life cereal PEP in which the cereal box name changed from Giant Size at 24.8 ounces to Family Size at 22.3 ounces.
Dworksy said it's common for customer favorites to be re-sized and re-introduced under a new name, emphasizing manufacturers have gotten really good repackaging and repricing.
In many ways, the concept of shrinkflation is just a magic show, according to data scientist Sheldon H. Jacobson of the University of Illinois Urbana-Champaign. It's much like a magician works, they do sleight of hand, they do something with their left hand, but nobody is looking at their right hand when you're doing something else, Jacobson explained.
The giant size is the family size, because it's no longer in their consumers mind. We can't compare those that are completely different labeling if something is new and improved, so we can compare that it's a different product. They're trying to befuddle the consumer, thinking they're getting better or different, but they're getting less and paying more. Follow her on Twitter at BrookeDiPalma or email her at bdipalma yahoofinance.com.