The New York Times has a piece about the impetus for shrinkflation, and the underlying economics.
“Companies are downsizing products without downsizing prices, and consumer posts from Reddit to TikTok to the New York Times comments section drip with indignation at the trend, widely known as ‘shrinkflation’,” the story says, noting that “the practice isn’t new. Sellers have been quietly shrinking products to avoid raising prices for centuries, and experts think it has been an obvious corporate strategy since at least 1988, when Chock Full o’Nuts cut its one-pound coffee canister to 13 ounces and its competitors followed suit.
“But outrage today is acute. President Biden tapped into the angst in a recent video. (‘What makes me the most angry is that ice cream cartons have actually shrunk in size, but not in price,’ he lamented.) Companies themselves are blasting the practice in marketing gimmicks. One Canadian chain unveiled a growflation pizza.”
But here’s a surprise: “It might be hard to believe, but shrinkflation appears to be happening less often today than it was a few years ago. The government adjusts official inflation data to account for product downsizing, and the data collectors who monitor for size adjustments caught fewer instances of shrinking household goods and groceries in 2023 than a few years earlier.”
The Times gos on: “Downsizing was frequent back in 2016, when overall inflation was low. It became rarer after the start of the pandemic in 2020, and more recently it has begun returning to prepandemic levels, analysts from the Bureau of Labor Statistics said. (The economists noted that the set of products being measured changed somewhat over the years, making comparisons across time more a rough approximation than an exact science.)
“But the magnitude for some products is more extreme now.
“Even if downsizing is not happening as often, shrinkflation today is having a big impact in a few key categories, including sweets, detergent and toilet paper.”
Enough so that this week legislation was introduced in Congress to address the problem. Sen. Bob Casey (D-Pennsylvania) has introduced the Shrinkflation Prevention Act of 2024, which USA Today described as giving “the Federal Trade Commission and state attorneys general authority to crack down on companies that skimp on products but don’t cut prices to reflect it … The legislation also authorizes the FTC and state attorneys general to pursue civil actions against corporations that engage in shrinkflation.”
The bill has seven Democratic cosponsors: Sens. Tammy Baldwin of Wisconsin, Elizabeth Warren of Massachusetts, Jacky Rosen of Nevada, Cory Booker of New Jersey, Sheldon Whitehouse of Rhode Island, Sherrod Brown of Ohio and Patty Murray of Washington as well Sen. Bernie Sanders, I-Vt.
KC’s View:
Brown, Baldwin, Warren, Rosen, Whitehouse, Brown and Sanders, if I’m not mistaken, all are up for re-election this year. Not that this means they are being disingenuous in their position. Just that it makes sense for them to take such a clearly pro-consumer position and try to get ahead of the inflation debate.
I appreciate the sentiment, but I’m reasonably sure that you can’t legislate a) the size of packaging and b) whether companies raise or lower prices. The increases may be instituted because companies can do it, vs. whether they need to do it to cover costs. But I’m pretty sure that’s not illegal.
The post “Shrinkflation” In The Spotlight appeared first on MNB.
View Original Article
