Since inflation peaked in June 2022, less than 1% of goods and services have downsized
Shoppers and politicians are complainingabout shrinkflation.Government data showit isn't very common or happening morethan in the past.
ConsumerAffairs analyzednew datafrom the Consumer Price Index (CPI) on product downsizing and upsizing, which published at the end of May 2024 and will update quarterly. The CPI published the data in response to concerns about shrinkflation, or the practice of packaging fewer units in a productwhile charging the same or more.
Most of the items fall under the food-at-home category, including cereal, bread, eggs and milk. Personal care products, household cleaning supplies, paper productsand cosmetics also saw changes.
Companies downsized 3,184 itemsbetween Jan. 2015 to March 2024, but they alsoupsized 1,386 items, according to the CPI.Since inflation peaked in June 2022, companies have downsized 664items and upsized 192 items, accounting for around 21% of downsizing and 14% of upsizingsince 2015.
To put that in perspective: The CPItracks around 100,000 goods and services, meaning only around 3% have experienced downsizing while 1% experienced upsizing since 2015.Since inflation peaked in June 2022, less than 1% of goods and services have downsized.
More broadly, the CPI tracks 249 goods and service categories and 73 of those, or nearly 30%, have seen either downsizing or upsizing of at least one item since 2015. Still, despite heightened concerns around shrinkflation, product downsizing has trended lower lately after reaching high levels in 2015 and 2016.
"We are not at the peak of downsizing and are, in fact, down from historical highs," Ernest Baskin, associate professor of food marketing at Saint Joseph's University, told ConsumerAffairs.
The most recentavailable CPI data from2015 to 2021 shows the categories with the most downsizing are household paper products and snacks, which notched downsizing of around 1.8% and 0.5% among all their respectiveitems. Both of those categories also saw1.1% and 0.1% ofupsizing.
The data showing relatively little downsizing comes as public surveys,politicians and the media have raisedalarms about shrinkflation following the economy's reopening after the coronavirus pandemic. Some 81% of shoppers have said they noticed shrinkflation, according toa March 2024survey of 1,000 consumers by Clarify Capital.
President Joe Biden, sitting next toDoritos, Gatorade and Breyers ice cream,posted a video in Februarycriticizing companies for shrinkflation. And the Federal Trade Commission and some members of Congress are trying tomake it illegal to downsize products without lowering prices.
Why the disconnect on shrinkflation?
People are noticingor think they are noticingshrinkflation because they are sensitive to higher prices and are doing more research at grocery stores, including checking the unit counts when they didn't before,Leo Feler, chief economist at market research firm Numerator, told ConsumerAffairs.
"This kind of comparison over these pastfew years has perhaps led to an overthinking ofshrinkflation," he said. "And that it is something a lot more nefarious than it actually is."
Feler also said it is difficult for companies to downsize their products because of the nature of manufacturing and supply chains, pointing to how less than 2% of grocery items tracked by the CPI have seen downsizing.For instance, companies need to coordinate with retailers, alter packaging and change labeling.
"Companies can'teasily snap their fingers and change the size of a product, it takes a while to do," he said.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-06-12 11:30:33
