Rising prices for everything from gas to food are costing consumers money. But that’s not the only way they’re affected. To combat higher manufacturing costs – known as input costs in the industry – manufacturers are reducing the size of their packaging, offering consumers less for the same price.
Known as shrinkage, it has been around since the 1960s and typically occurs during times of high inflation, allowing manufacturers to pass on increases in ingredient and labor costs while keeping consumers largely in. ignorance.
“It’s a tactic companies have used for a long, long time whenever input costs go up,” says Akshay Rao, a professor at the University of Minnesota’s Carlson School of Management. “It all started when vending machines only took certain coins. It was difficult to change the price on vending machines, so manufacturers reduced the quantity provided for the price.
With inflation hitting its highest level in 40 years in February, contraction in inflation is once again becoming commonplace. From toilet paper to yogurt, consumers and advocates are seeing many cuts to popular products. “We’re in the midst of a shrinking wave,” says Edgar Dworsky, founder of Consumer World and a consumer advocate who has tracked shrinkage for more than 30 years. “Some manufacturers do both, raising prices while cutting products.”
Spotting the narrowing can be difficult. It requires you to calculate the weight of a product that you get for the price. Most grocery stores are required to list this price, known as the unit price, but it’s often buried in the fine print and can be hard for some seniors to see.
“It’s part of the strategy. The store and the manufacturers don’t want you to focus on the unit price,” says Rao. “They want you to focus on the retail price. This is how they tell you the cost and quality. But Rao says consumers should definitely focus on unit price and monitor it week-to-week to gauge whether they’re paying more for less. If an item is reduced from 40 tokens to 36, this is equivalent to a 10% price increase. “It’s a classic case of caveat emptor (buyer beware). If you’re not a smart shopper, you’ll be taken advantage of,” Rao says.
Toilet paper rolls are shrinking
When it comes to this shrinking wave, it runs the gamut from toilet paper to cookies. Take Cottonelle and Charmin, two popular toilet paper brands. With rising manufacturing costs, both manufacturers adopted a shrinking strategy. Last winter, Dworsky says Cottonelle reduced the number of its mega rolls to 312 1-ply sheets from 340 sheets per roll. The soft version has been reduced to 268 2-ply sheets of 284
Charmin has reduced the size of its ultra-soft mega rolls to 244 double-ply sheets from 264. Its super mega roll has been reduced to 366 sheets from 396. everything,” says Dworsky. “I’ll keep an eye on that.”