New data show shrinkflation isn't as big of a problem as people think

An analysis of federal data suggests 'shrinkflation' isn't as much of a problem as many believe - Photo by Franki Chamaki on UnSplash

Since inflation peaked in June 2022, less than 1% of goods and services have downsized

Shoppers and politicians are complaining about shrinkflation, but it isn't very common or happening more than in the past.

ConsumerAffairs analyzed new data from 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 product while 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 products and cosmetics also saw changes.

Companies downsized 3,184 items between Jan. 2015 to March 2024, but they also upsized 1,386 items, according to the CPI. Since inflation peaked in June 2022, companies have downsized 664 items and upsized 192 items, accounting for around 21% of downsizing and 14% of upsizing since 2015.

To put that in perspective: The CPI tracks 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 recent available CPI data from 2015 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 respective items. Both of those categories also saw 1.1% and 0.1% of upsizing.

The data showing relatively little downsizing comes as public surveys, politicians and the media have raised alarms about shrinkflation following the economy's reopening after the coronavirus pandemic. Some 81% of shoppers have said they noticed shrinkflation, according to a March 2024 survey of 1,000 consumers by Clarify Capital.

President Joe Biden, sitting next to Doritos, Gatorade and Breyers ice cream, posted a video in February criticizing companies for shrinkflation. And the Federal Trade Commission and some members of Congress are trying to make it illegal to downsize products without lowering prices.

Why the disconnect on shrinkflation?

People are noticing—or think they are noticing—shrinkflation 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 past few years has perhaps led to an overthinking of shrinkflation," 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't easily snap their fingers and change the size of a product, it takes a while to do," he said.

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