On October 8, us western time, according to a number of media reports, inflation soared after the new crown epidemic. Partly due to global supply bottlenecks and worker shortages, companies are under more pressure to cope with rising costs.
Commodity prices have almost all risen, and the price increases of some commodities are very obvious. For example, at meat counters or car dealers, some price increases are more subtle. In the aisles of grocery stores, for example, this is because many manufacturers have chosen to shrink the packaging instead of raising prices. This trend is known as "shrinking inflation.".
Consumer advocate Edgar Dworsky said he has found dozens of products with prices sneaking up in recent months. From Charmin toilet paper rolls and Cheerios cereals to canned royal Canin cat food, size and weight have been reduced, but prices have remained the same. Dvorski has been following the phenomenon of "shrinkage" for 25 years.
General Mills, a major food factory, has reportedly been blamed for shrinking household cereal from 19.3 ounces to 18.1 ounces.
Oregon-based Tillamook also admitted that they shrunk the barrel of ice cream by 8 ounces. Customers buy fewer rolls of toilet paper than they did a year ago, and orange juice now suddenly has a larger incision that forms the handle.
Last month, Cheerios cereal maker and food giant General Mills also pointed out that soaring raw material and labor costs have not only justified traditional price increases. It also justifies the change in "PPA" (price packaging structure). PPA is a technical term for price packaging architecture that refers to the adjustment of size or quantity.
In the past, most of the public would not be aware of these subtle changes, but in the Internet era, they have become the focus of public attention. On the social networking site Reddit, the "Shrinking Inflation" group has 14,500 members who share their findings in a half-joking manner.
Jonathan Khoo, a 44-year-old software engineer from Oregon, said: "Shrinking inflation is more insidious, at least for me, and prices are not rising as noticeably." But he said he would feel like he was being played when he found a disguised price increase, which made the strategy "much worse" than a direct price increase.
Pierre Chandon, a marketing professor at the Behavioral Lab at the Insead at Sorbonne University in Paris, said shoppers felt cheated because most consumers mistakenly believed that the quantity of the drink was standardized and regulated.
Brian Johnson, another Oregon resident, recently discovered that the local ice cream brand Tillamook, which originally had a capacity of 1,420 milliliters, has now reduced by as much as 230 milliliters. Johnson said: "I know companies do this because the concept of price comes from years of consumer experience, and there will be expected price zones for buying goods of a specific capacity."
Dvorski said companies "will not take such a step easily." Because businesses do precise calculations, if they receive a complaint, they will send consumers a few dollar coupons to keep buying back.
Anand Krishnamoorthy, a marketing professor at the University of Central Florida, said even as the cost spikes have subsided, brands "have no incentive" to return to their original weight or size. There are examples of shrinking inflation in many other industries, from cramped apartments in cities to pitifully narrow spaces for airplane seats, but what we've noticed is consumer goods packaging.
In fact, there's no evidence that shoppers are disgusted with shrinking products, and even members of the Reddit group rarely call for a boycott of a brand. In addition, Shang Dong also offers another point of view, small packages are good for health. Shang Dong said: "We know that the more food we eat, the more we eat, and now we are returning to the normal diet level of not so long ago.
If you're buying groceries on a tight budget and want to avoid being fooled by shrinking inflation, make sure you're counting the price per ounce of goods and reading the small print on store price tags.
Norwood said that in order to cope with rising costs, companies basically have only three options:
1, make and package exactly the same thing, and raise the price. This may be the most straightforward option, but it may end up losing some customers.
2, reduce the quality of raw materials to reduce production costs, and keep the price low. But in this case, the brand's reputation can be threatened, and consumers will end up with a lower-quality product.
3, quantitative supply of products, can keep the product in the market, but only small packaging capacity. This is shrinking inflation.
Norwood admits that as life finally returns to normal, no one knows if prices will fall. I believe there are some manufacturers who will continue to keep the reduced capacity unchanged. Another thing is that some of these things might be better off eating a little less, especially junk food.