"Shrinkflation" - How Food Companies Implement Massive Price Hikes Without You Ever Noticing

Tyler Durden's picture

Do you ever get the sense that your favorite steak at that Quick Service Restaurant of your choice keeps getting thinner and thinner all while your check size at the end of the night continues getting larger and larger.  Well, it is.  How else are publicly traded chains going to continue to deliver margin growth to wall street in the midst of rising labor costs, rising commodity costs and shrinking customer traffic?

As a new study in the U.K. just revealed, shrinking portion sizes among food manufacturers is actually way more common than you might think and you probably never even noticed it.  In fact, according to data from the Office for National Statistics, over 2,500 consumer products in the U.K. shrunk in size over the past five years despite being sold for the same price.

 

But it's not just food manufacturers that are shrinking portions while maintaining price as many consumers goods items from chocolate to coffee to toilet paper are all experiencing the same trends.  Known in grocery circles as 'liar packs', shrinking portion sizes became an attractive alternative to simply raising prices back during the great recession when consumers became particularly sensitive to price.  Of course, the net effect is exactly the same but it's much more difficult to notice that fine print on the bottom corner of the packaging than it is the price tag at check out.  Per The Telegraph:

Mark Jones, a food and drink solicitor at Gordons law firm, said: “Shrinkflation was borne out of the recession and has gathered staggering pace since 2009. The ONS’s report confirms this. Against the back drop of a weak economy, commodity prices have been rising over the last five years.

 

"The recession made people very price sensitive and you can see the evidence of that by looking at the impressive growth of discount retailers in the last five years, no retail sector has grown faster.

 

“Suppliers and retailers do not want to raise the ‘on the shelf’ price, but both have had to adapt to increasing commodity prices.

 

"Shrinking the size of the products being sold, whether that is toilet paper, chocolate or cleaning products, is just another way of pushing through a price increase, but in a more subtle way. How many of us noticed Andrex reduce the number of sheets on a toilet roll from 240 to 221?”

 

And here is the breakdown by month over the past 5 years:

 

But it's not just British consumers getting duped by "shrinkflation" as all the same games are played in the U.S. markets as well.  For example, who is actually going to notice that 10 sheets of paper are missing from the Bounty rolls on the right versus those on the left?  Yet, assuming that both packages are sold at the same price this small reduction in size equates to a substantial 9% price hike on a per sheet basis.

 

Meanwhile, these containers are completely identical aside from some tiny print in the bottom right hand corner.

 

Conclusion: Caveat emptor...there is a whole army of Harvard MBAs working in consumer goods companies all around the world whose sole mission in life is to get you to pay more for less without ever noticing.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Sonny Brakes's picture

Of course, I notice. And it's not only food. Rolls of toilet paper are being toyed with. People, for the most part, seem to be too embarrassed to acknowledge the obvious. I swear the quality of certain things is also suffering.

Some business models will die. Here in Canada, the Texas Lone Star chain has decided that restaurant managers will now start participating in sharing the waitresses' tips because they can't raise their prices.

Don't think for a minute that the consumer won't be the ones footing the bill for AI and automation. Guess what, Mr I Will Automate My Production, you can't lay-off an automated factory. Chances are pretty good that those costs will be coming out of someone's salary.

Golden Showers's picture

Down here the French Navy Fag Pastry Chef takes all them cash money tips and pays minimum wage to servers. It's a great scam. He pays his cooks with cash tips out the box.

And when he comes into work he starts talking shit. It's fine because you can't understand what the motherfucker is saying. Something about Stroomphs and shit. I don't know. And when I go to his store on other business he acts real nice.

Used to buy him box wine from Walgreens and he tried to get me to toke up with him but I don't smoke weed I don't buy and since I don't buy any I don't get none. Except for when it's really good fucking weed and that was 5 years ago. So I hide it.

I think the real problem is that you fucking people out there just think you deserve more than the serving size. And shit has changed, bitch.

How else are you going to learn that your place is in a cubicle that is 12 by 8 and you get rations in the city. I'm just ashamed that you don't even value what you have and want and want and expect more chocolate bars, toilet paper, and food for nothing.

Fuck. If you want more, buy 2. That never occurred to you. I knew a guy in Ridgewood who sent his only daughter to B.U. and he wasn't satisfied with one house so he bought the next door house. That's what I'm saying. If the shoe don't fit, don't wear it. Buy another pair.

Or do it like we do and fuck everyone over. That's what's up.

Manthong's picture

 

Unless you go to Costco, try finding a ½ gallon of ice cream…

And I just discovered this…

I do not drink much soda pop but a six pack of 12 ounce diet Pepsi cans at the local Wal-Mart just morphed into an eight pack of 7.5 ounce cans. Time to quit that fizzy poison altogether.

Water and/or Everclear (they look the same) seems to be a good solution.

My late grandfather claimed that he quit smoking when cigarettes went up to a dime a pack.

 

Ralph Spoilsport's picture

My old man quit when smokes hit $1/pack. And try the cola  Aldi sells under the name Summit cola. 12 packs are around $2 and  tastes better than Coke.

LyLo's picture

Their orange pop is outrageously good.  Personally, I can friggin' taste food coloring (holdover from the candy business, I think) and orange pop uses sooo much coloring to achieve that weird dayglow color.  Aldi's orange is clear.  And delicious.  And cheap.  At this point, if we do have pop in the house it's usually this pop.

tmosley's picture

Reminds me of the story about how the baker's dozen came to be.

If a baker shorted you on the size of his baked goods, he would be put to death, so bakers, just to be sure they didn't accidently short the customer, would throw in an extra roll with every dozen.

Of course, the problem was with government policy to start with, but they'd rather kill all the bakers than fix their shitty monetary policy.

Lordflin's picture

Imagine how bad this problem would be if there were any real inflation...

Stuck on Zero's picture

This is all neeaary to keep up those huge CEO bonuses.

Give Me Some Truth's picture

Re: This is necessary to let CEOs keep their huge bonuses.

I think this is correct and really makes another important point: The ONLY WAY these companies can keep (or grow) their profit margins is to use "shrinkflation" and "subsitution." This creates the illusion that the companies are doing great and - what? - inflates their stock prices. Stocks going up creates the illusion that - what? - the economy is doing great! And, yes, the CEOs keep getting those bonuses. And, companies can also keep buying back their own stocks - which further helps advance the same goals and creates the same results.

It's all based on sneaky techniques that the companies hope that no one notices. Well, they know people are starting to notice. However, they know that the MSM and Congress aren't going to shine a light on this trend/issue. These people know why this is being done and why this truth should not be exposed on a large scale.

If you expose this "story," you would have to admit that the "official" meme - "inflation is contained" and the "economy is doing fine"-  is bogus/false/a lie, aka "fake news."

Here's the important question: WHY are these companies shrinking their products and using cheaper ingredients? Answer: They HAVE to. 

If the economy was really growing, if inflation was really "contained," they would NOT have to do this. Shrinkflation confirms - is obvious evidence - that the official memes are bald-faced lies.

LyLo's picture

Dude, you serious?  You're on ZH.  WE KNOW. 

I mean, yeah it bears repeating, but you are just doing a basic summation of the core beliefs that bring such an eclectic group of people from all over the world to constantly fight it out on these boards.  Seriously: you've not scratched your noggin over that one yet?  What could possibly unite the anti-zionists, zionists, conservatives, libertarians, liberals, alt-right, Christian fundamentalists, and hell even whatever EML was?  (I still wanna know if that guy was going to eat that baby in his pic...)

Next, you'll be all like, "Wait, if we just end the Fed..."

The Blank Stare's picture

Here's the link to the Mouseprint web site that's tagged on the photos.

Doesn't get a lot of traffic but some dedicated people I think.

http://www.mouseprint.org

2000's picture

GOOD LORD! Do you people believe everything ZH posts?

When hedonically adjusted, the quality of these products is far superior to what they were just a few days ago even.

Quite honestly, these types of decisions should be considered an act of charity.

Now, let's all save some money by going to Walmart and buying some TVs. I hear they're far cheaper this year than a few years ago (when hedonically adjusted). I'm also looking for some hedonically adjusted grapes. I'm a frugal person who loves a good deal.

Diatom's picture

About Coca-Cola...

I don't drink that shit for more than 15 years. Simply because its an american shit.

For those who like it, the best Coke in the world in terms of taste appears to be the portuguese. This is confirmed by 3 family members: One in Canada, one in Florida and one in Switzerland...

So for those interested in visiting Portugal, we have outside air conditioning all year and apparently the best fucking Coke in the world...

Déjà view's picture

Smaller packaging = eat less = less toilet paper...

mkkby's picture

Don't fucking complain to me about food prices.  What kind of dumb shit buys brand name paper towels or orange juice?  If you're that stupid you should pay up.  I hope they double the price.

Fruit juice and soda are just sugar water.  All the fructose is turning you diabetic.  Look at all the land whales waddling around and this is the main culprit.

Food is very cheap if you are smart.  Buy generic vegetables/meat/eggs/cheese and prepare healthy meals for half the cost of the expensive garbage.  Frozen veggies are 80 cents a pound and snack chips or cereal are 6 bucks a pound.

Instead of buying single use paper towels, use a 60 cent sponge.  It lasts for months if you keep it clean and dry between uses.

GUS100CORRINA's picture

Observation: Shrinkflation has been going on for 5 years!!!!! It started in 2012 with candy and has moved right across both the food and consumer product chains.

The FED, who are a bunch of DUMB ASSES with SHIT for BRAINS, have covered this up for years by altering their measurements. Even GREENSPAN did it!!!

CVS, WALGREENS, TARGET and WALMART have been criminals in this cover up as well. 

Truly sad. Just makes my blood boil when one realizes what has taken place.

Rakksan's picture

Come on now! Shrinkflation started in the early 70's. Have you been out of the country?

effendi's picture

Agreed! I remember as a kid that standard toilet rolls were 500 sheets and they have been getting less over the past 45 years, so much so that modern toilet roll holders are only made to hold rolls of under 300 sheets.

youngman's picture

was it made by Sears.....and have nice pictures on it???

BrightBlueSkies's picture

Whole Foods sells their 365 Black Tea at a permium price yet fills the individual tea bags less than halfway, so it takes two tea bags to brew one cup of tea. Makes for a very expensive cup of tea. Won't be buying tea from whole foods again.

Agstacker's picture

But remember, according to the MSM there is no inflation, or it's like 1% a year.

NoPension's picture

A dozen eggs around here...large...79 cents.

LyLo's picture

They are $0.43 here.  At this point, $0.79 is what I pay for a half gallon of milk (full gallon is $1). 

Not to get into your business or anything, but you may wanna consider relocating to an area that isn't hellbent on price-gouging itself to poverty.

The Blank Stare's picture

The milk in the US is crap. Tasteless white liquid would be a better name. I notice when I go back that the hotdogs have shrunk big time and shrink when ovened. Same shit going on here in Japan as well. Especially the sweets and snacks.

man from glad's picture

In a few years we will be looking back at these portions as the good old days. Everything is getting smaller, poorer quality or just more expensive. It is only going to get worse.

The central planners's picture

I do not drink much soda pop but a six pack of 12 ounce diet Pepsi cans at the local Wal-Mart just morphed into an eight pack of 7.5 ounce cans. Time to quit that fizzy poison altogether.

That why they did it in first place, they want you to consume less poisoned water ;)

a Smudge by any other name's picture

How many Harvard MBAs does it take to screw in a lightbulb? Doesn't matter, they hire people to do it for them.

How many Harvard MBAs does it take to tell us what we already know? Is infinity really a number?

Mementoil's picture

The funny thing is that whenever you buy an ounce of gold these days you still get 31.1 grams of the stuff, and since 2013 it actually costs less!
Go figure!

Seb's picture

Yeah. Not so great "wealth protection" when the price keeps falling, isn't it?

Moe Howard's picture

Your are correct, it is obviously better to keep your accumulated wealth in FRNs.

 

We all know they haven't lost any value over the years.

 

Talk about a depreciating asset. lol

Bay of Pigs's picture

You don't hear much from the deflation dumbshits on these threads anymore.

Ballin D's picture

Well he is thinking about gold priced in dollars so gold is sharing that same depreciation baked into the quote.

rrrr's picture

"FRN's," of course, are French Registered Nurses, value of which have been consistently the same for hundreds of years.

tmosley's picture

Hahahaha, justify it all you like, but your PMs have plummeted in terms of that plummeting paper.

The central planners's picture

I heard bitcoin its very close to reach the half million dollars.  McCoffe saved his cock.

SubjectivObject's picture

reduced quality .... it's called crapification

This is it's picture

How do hookers respond to inflation? 

Pooper Popper's picture

Hmmmm not sure...but I ve been feeling a little off.

I fell asleep in the barn again,,and I had a dream I was dancing with a whale...

When I woke up the cow had eaten my pants....

LA_Goldbug's picture

Silly Rabbit, tricks are for kids.

waspwench's picture

Same way they always did.

Pol Pot's picture

I am not sure about hookers...but $1 tucky at a strip club still gets the same as twenty years ago...no inflation here....

Beowulf55's picture

...except, the strippers are fatter...

Pol Pot's picture

And I thought it was just me drinking.....after a few they all look good.

Pernicious Gold Phallusy's picture

For many years now the strip clubs here give change in $2 bills and coin.

Pooper Popper's picture

My toilet floss looks all lonely on the dispenser....

LA_Goldbug's picture

Sorry but I noticed it a long time ago when nice round numbers started to change. For example 100 gr to 73 gr. However Tablerone was easy to spot. Lousy chocolate anyway.

adanata's picture

....ha... my personal favorite is the "hollowed out from the bottom" jar. The hidden indentation first caught my attention with a coffee container, then mayo... then ALL of them... over the last couple of years the indentations have become much larger. I figure pretty soon a "whole" jar will be half a jar... just like a regular roll of TP is now a "double roll"... 

LA_Goldbug's picture

+1000
Brilliant observation !!!!

Have you noticed how they do that with some alcohols ?

syzygysus's picture

Haven’t seen that. Though the punt on champagne bottles is necessary for pressure reasons. Still 750ml unless you get a different size format.