The continued decline in Treasury yields has prompted many short-sighted arm-chair analysts to declare that the Fed was right about inflationary pressures being “transitory”. Of course, as Treasury Secretary Janet Yellen herself admitted, a little inflation is necessary for the economy to function long term – because without “controlled inflation,” how else will policymakers inflate away the enormous debts of the US and other governments.
As policymakers prepare to explain to the investing public why inflation is a “good thing”, a report published this week by left-leaning NPR highlighted a phenomenon that is manifesting in grocery stores and other retailers across the US: economists including Pippa Malmgren call it “shrinkflation”. It happens when companies reduce the size or quantity of their products while charging the same price, or even more money.
As NPR points out, the preponderance of “shrinkflation” creates a problem for academics and purveyors of classical economic theory. “If consumers were the rational creatures depicted in classic economic theory, they would notice shrinkflation. They would keep their eyes on the price per Cocoa Puff and not fall for gimmicks in how companies package those Cocoa Puffs.”
However, research by behavioral economists has found that consumers are “much more gullible than classic theory predicts. They are more sensitive to changes in price than to changes in quantity.” It’s one of many well-documented ways that human reasoning differs from strict rationality (for a more comprehensive review of the limitations of human reasoning in the loosely defined world of behavioral economics, read Daniel Kahneman’s “Thinking Fast and Slow”).
Just a few months ago, we described shrinkflation as “the oldest trick in the retailer’s book” with an explanation of how Costco was masking a 14% price hike by instead reducing the sheet count in its rolls of paper towels and toilet paper.
NPR’s report started with the story of Edgar Dworsky, who monitors grocery store shelves for signs of “shrinkflation”.
A couple of weeks ago, Edgar Dworsky walked into a Stop & Shop grocery store in Somerville, Mass., like a detective entering a murder scene.
He stepped into the cereal aisle, where he hoped to find the smoking gun. He scanned the shelves. Oh no, he thought. He was too late. The store had already replaced old General Mills cereal boxes — such as Cheerios and Cocoa Puffs — with newer ones. It was as though the suspect’s fingerprints had been wiped clean.
Then Dworsky headed toward the back of the store. Sure enough, old boxes of Cocoa Puffs and Apple Cinnamon Cheerios were stacked at the end of one of the aisles. He grabbed an old box of Cocoa Puffs and put it side by side with the new one. Aha! The tip he had received was right on the money. General Mills had downsized the contents of its “family size” boxes from 19.3 ounces to 18.1 ounces.
Dworsky went to the checkout aisle, and both boxes — gasp! — were the same price. It was an open-and-shut case: General Mills is yet another perpetrator of “shrinkflation.”
It’s also being used for paper products, candy bars and other packaged goods.
Back in the day, Dworsky says, he remembers buying bigger candy bars and bigger rolls of toilet paper. The original Charmin roll of toilet paper, he says, had 650 sheets. Now you have to pay extra for “Mega Rolls” and “Super Mega Rolls” — and even those have many fewer sheets than the original. To add insult to injury, Charmin recently shrank the size of their toilet sheets. Talk about a crappy deal.
Shrinkflation, or downsizing, is probably as old as mass consumerism. Over the years, Dworsky has documented the downsizing of everything from Doritos to baby shampoo to ranch dressing. “The downsizing tends to happen when manufacturers face some type of pricing pressure,” he says. For example, if the price of gasoline or grain goes up.
The whole thing brings to mind a scene from the 2000s comedy classic “Zoolander”.
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This has been going on for at least ten years, 2% inflation ok can anybody on here tell me anything the government says is true. anything?
Yup. They want our weapons. That’s about it.
Nothing new here, it’s been doing on for quite awhile. Your dollar is worth less and more are needed to buy stuff.
In Queen Victoria’s England, during the Industrial Revolution when most of the rural folk had moved to the cities the bakers would add chalk and alum o the bread dough because flour was expensive. Food was adulterated with some nasty shit. Boric acid was added to milk….
The list of poisonous additives reads like the stock list of some mad and malevolent chemist: strychnine, cocculus inculus (both are hallucinogens) and copperas in rum and beer; sulphate of copper in pickles, bottled fruit, wine, and preserves; lead chromate in mustard and snuff; sulphate of iron in tea and beer; ferric ferrocynanide, lime sulphate, and turmeric in chinese tea; copper carbonate, lead sulphate, bisulphate of mercury, and Venetian lead in sugar confectionery and
chocolate; lead in wine and cider; all were extensively used and were accumulative in effect, resulting, over a long period, in chronic gastritis, and, indeed, often fatal food poisoning. Red lead gave Gloucester cheese its ‘healthy’ red hue, flour and arrowroot a rich thickness to cream, and tea leaves were ‘dried, dyed, and recycled again.’
As late as 1877 the Local Government Board found that approximately a quarter of the milk it examined contained excessive water, or chalk, and ten per cent of all the butter, over eight per cent of the bread, and 50 per cent of the gin had copper in them to heighten the color.
It was Upton Sinclair who brought these adulterations to light when he wrote ‘The Jungle’ about conditions in the Industrial Age’s factories and ghettos.
Soooo, nothing new under the sun…even now wood is added to bread in cellulose. Then go read the list of chemicals in processed foods and look at the ‘gums’ used as thickeners. All of them upset the gut microbiome and yet are heavily used in ‘natural’ and organic foods.
https://victorianweb.org/science/health/health1.html
One of the most prolific shrinkers is Smuckers. Their recent shrinks of Folgers coffee is well over the typical 10%. Their Classic Roast that used to be 30.5 oz is now around 24-26 oz.
Anyone remember the 3 lb metal coffee cans of yesteryear? Great for saving all kinds of stuff that kids need to save. And darn near indestructible. And probably priced at a fraction of the stuff they pass off as coffee these days.
Same thing is happening in fast food world – McDonalds Chicken Nuggets – they are now much thinner than they used to be – similar shapes overall but much thinner – checking calorie listings from past to now they were 480 calories for 10 piece and now per their website are 420 – 60 calories less – if my math is right that’s 12.5% less than before
Best to reduce those Nuggets by 100%. They are at best 39% chicken, with a bunch of additives as noted below. Additionally, they are cooked in seed oil, seed oils are killers. If there is one thing to remove from ones diet it is seed oil. There are good fats and bad fats, these things are bad fat.
Eat Real Food, organic as much as possible!
From LiveStrong:
LISTED INGREDIENTS: Chicken McNuggets: White Boneless Chicken, Water, Food Starch-Modified, Salt, Seasoning (Autolyzed Yeast Extract, Salt, Wheat Starch, Natural Flavoring [Botanical Source], Safflower Oil, Dextrose, Citric Acid), Sodium Phosphates, Natural Flavor (Botanical Source). Battered and Breaded with: Water, Enriched Flour (Bleached Wheat Flour, Niacin, Reduced Iron, Thiamin Mononitrate, Riboflavin, Folic Acid), Yellow Corn Flour, Bleached Wheat Flour, Food Starch-Modified, Salt, Leavening (Baking Soda, Sodium Acid Pyrophosphate, Sodium Aluminum Phosphate, Monocalcium Phosphate, Calcium Lactate), Spices, Wheat Starch, Dextrose, Corn Starch. Contains: Wheat.
White chicken means something that used to be part of a chicken that has been bleached white. One of the factories that makes nuggets is only fifty miles from here and I know some former employees.
How many lost a hand to the meat grinder?
This isn’t new.
Coke/Diet Coke has 2 main types of packaging for cans: a large rectangular box and a narrow rectangular box.
The large box started out as 24 cans and would be used to put the product on sale. It could be bought for $5 (or sometimes less). This box has shrunk twice: first to 20 cans, and now to 18 cans. I don’t remember when precisely this occurred but the 18 can change was in the last 6 months to a year, and the 20 cans probably 2-3 years ago.
The 12 pack, on the other hand, hasn’t changed in size but continues to change in price. I remember clearly when you could buy them for $2 on sale. Today, list price in the local grocery store is $7.99 to $9.99! That’s $0.83 per can! Some of this is likely because of the local “soda tax”, but nowhere remotely all of it. This makes buying a coke cheaper when buying from McDonald’s and its $1 menu: a large McDonald’s soda for $1 is equivalent to a can of Coke plus ice.
The 18 pack started with Busch Light and was meant for single alcoholic men. Or so I have heard. That was many years ago.
I have an older lady friend on SS who hits the food bank here. She goes once a week, and they put stuff in her car, she drives off and I’ll go help her divvy up the food at her house. Most of what’s there is stuff that is at or on the sell-by date. Veggies and fruit are far from pristine but still edible, sorta. Lots of odd label canned goods and bakery goods, many that are beyond rotten. Much formerly frozen stuff that has thawed and isn’t safe to eat.
I asked her about the poor quality and she said it was really bad, not like what she used to get. So even the Food Banks are getting crappy products, stuff that should go to the trash is being handed out.
It will only get worse with time.
My Uncle Buck drunk himself to death: worked hard all week selling cutting tool bits then went home to watch the Red Sox games-Friday, Saturday, and maybe double header on Sunday. He generally downed 1-2 six packs every game. In those days they did not have the 18, 24, or 30 packs like today.
Days ago 16 oz. Spring Mix $3-5
Now: 10 oz. $5
It is all over the place and it is rapid. If this continues, this is it.
Fortunately i like dried beans,rice,potatoes,oatmeal,cabbage,and tortillas.Unfortunately my daughter will starve. Even worse,my wife cosigned her student loans.
I think that diet would kill me.
It does sound a tad ‘explosive’ especially the beans and cabbage part.
The Ice Age Farmer’s latest goes beyond shrinkflation to food ‘brownouts’, rolling shortages and empty shelves.
Thanks for the heads up …. I was thinking my hands had grown.
First the stupid Mega-Jumbo rolls wouldn’t turn properly in the holder at home, now this!
The shrunk toilet paper rolls are asinine, the rolls no longer fit the “standard “ toilet roll holder (too narrow). Not a problem at home with the spindle in the middle, but I notice at my commercial customer accounts where the holders only hold the ends of the roll, they can no longer “hang on”.
Coffee cans have been shrinking a long time too, and chip bags as well. I tend to get nerdy about unit pricing, so I catch most of this when I’m shopping with the wife. Last Saturday at Walmart, miracle gro potting mix was $6 for 1 cubic foot bag or $13.47 for a 2 cubic foot bag. That’s just a tax on people bad at maff and sheet.
Scotts owns Miracle Grow; sadly, Scotts made the decision about 2 decades ago to sacrifice quality as well as quantity. I refuse to buy any of their crap.
The shrink has been going on for a long time now.