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By Canadian Press

"Shrinkflation"

Pay the same, get less: How ‘shrinkflation’ masks price increases

Sep 2, 2021 | 7:03 AM

Experts say reducing the amount of food in a package is a subtle way to adjust for inflation without raising prices as higher shipping fees and labour shortages drive up costs for food manufacturers.

The reduction in package sizes to offset rising input costs while keeping prices stable is a retail strategy known as “shrinkflation.”

An original package of Oreo cookies, for example, has shrunk by about three cookies to 270 grams from 303 grams, a roughly 10 per cent reduction by weight.

A bag of Lay’s potato chips now weighs 165 grams, down from 180 grams, Quaker Chewy granola bars come with five bars rather than six or 120 grams instead of 156 grams, and Armstrong cheese is 600 grams rather than 700 grams.

Food producers have also redesigned orange juice bottles to create a larger hollow bubble of space on the bottom, giving consumers the impression that the bottle is the same size while in fact reducing the amount of juice.

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Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University says food processors want to remain competitive in an inflationary market, and in order to do that they play around with quantities instead of charging more for products.

He adds he is concerned “shrinkflation” could affect how food inflation is tracked in Canada, noting we might be underestimating food inflation if shrinking package sizes aren’t accounted for.

Statistics Canada says its consumer price index compares the cost of a fixed basket of goods and services over time, and its commodity specialists are able to do a quantity adjustment accounting for changes in package size to ensure price increases are reflected.

(The Canadian Press)