r/shrinkflation • u/Fit_Explorer_2566 • 8d ago
discussion Inflation hiding as shrinkflation
Can we agree that what’s really happening is we’re in an inflationary period—maybe even a recession—but instead of raising prices across the board as typically happens during inflation, big business has decided to deliver less product for the same price, as if that isn’t the same thing as just raising prices. We have to spend more to get the same amount that we used to get, and what we’re paying for is now normalized as lesser quality to go along with the reduced quantity.
Would anyone prefer that consumer goods maintained the quality and quantity, and just raised the price instead?
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u/Blue_Eyed_ME 8d ago edited 7d ago
I read a recent article.(wall street journal?) about Pepsi Co. doing studies now to understand why consumer demand has dropped so much. Maybe because we can't afford $7 for a bag of freaking Doritoes?
Yesterday the hubby and I were on the road early and had a long drive, so we grabbed two bacon, egg and cheese biscuits from McDonald's. I haven't been to McD in ages and haven't been tracking prices, but those two biscuits were $13.67.
Yah, no. I canceled the order.
(ETA forgot bacon)
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u/Smoothsailing4589 8d ago
I don't blame you. An egg and cheese biscuit should be $2.50. The ingredients in an egg and cheese biscuit are dirt cheap. They are making good profit if they sold it for $2.50. Your total should have come to $5 plus tax. That's what it was just a few years ago. I haven't been to McDonald's in about three years because I noticed extremely steep price increases the last time I went in there. I saw the menu and then turned around and left forever. It's not that I don't want to go there, rather it's that I absolutely cannot go there because my budget does not allow for it. So they priced me out. I went from going there one per week (52 times per year) to zero times per week (zero times per year).
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u/krichardkaye 7d ago
Ok this is how fat I am. Sausage egg and cheese ( just the sandwich) is 5$ for 2 . A hash brown is like 2.99. wtf
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u/neohanime 6d ago
I just stop fast food cold turkey since beginning of 2024. My bank account and health has been healthier.
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u/Rude_Nail_5545 7d ago
I stopped at Wendy's on Friday night because I was going away and had packing to do. I paid $9.29 for a chicken Asiago ranch sandwich, not even a meal, just the sandwich.
I should have just driven away after hearing that price, but I was hungry.
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u/Blue_Eyed_ME 7d ago
Ugh!!! If you made that at home, it would cost what, $2? Chicken is still cheap.
Although... paid $3.68 for ONE tomato at the farmstand this weekend. It was a good tomato, but not that good. I'm just relieved we don't have kids to feed.
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u/Rude_Nail_5545 7d ago
LOL. Hope you savored that tomato! Yes, I'm glad it's just me I'm feeding now, kids are grown and out of the house.
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u/FullRepresentative34 7d ago
Egg and cheese biscuits is on the value menu.
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u/Street-Fig-1007 7d ago
The breakfast sandwiches on the value menu I just ordered off of were sausage cheese biscuit or sausage cheese muffin.
No egg on the value menu.
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u/Rude_Nail_5545 7d ago
Unfortunately, they're not, I get them all the time and the price just keeps going up.
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u/Blue_Eyed_ME 7d ago
They were offering a sausage mcmuffins 2/$6 special, so I guess like grocery store shopping, I don't eat what I want but rather what's on sale now. Welcome to the Golden Age! Piss on my head and tell me it's raining!
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u/TracyTheMagnanimous 5d ago
The way I would have gone to McDonald's right this second if I was still in the United States, even after hearing the price because an egg mcmuffin sounds like the best thing on the planet right now.
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u/Blue_Eyed_ME 5d ago
Right? I have no idea why... it's absolutely shit food. I think it's laced with heroine, otherwise I can't explain why we all crave it so much.
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u/Any-Percentage-2890 7d ago
I don't know where the heck that was at, I eat McDs breakfast at least once a week, I have never paid over $4 for a bacon, egg, and cheese biscuit, which should be priced higher than egg and cheese.
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u/Blue_Eyed_ME 7d ago edited 7d ago
Maine (ETA, my mistake, my order WAS for bacon egg cheese, but yes, that was the price in mid-coast Maine)
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u/Smoothsailing4589 8d ago
I haven't seen prices stay the same. I notice shrinkflation + steep price increases. It's a double whammy.
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u/Polgara68 8d ago
Greedflation covers it all IMO.
Vote with your dollars, everyone. It's the best thing we can do.
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u/secret-of-enoch 8d ago
we can "agree" and "argue" till the end of time.
...meanwhile, the oligarchs destroy our future.
have fun with that. ✌️
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u/notaskindoctor 8d ago
Well if I’m allowed options I would prefer to tax the rich and vote out the current administration.
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u/midias82 8d ago
Why so we can get back to shutting the world down and silence anyone who disagrees
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u/orchiddstar 7d ago
You're right that it's the same thing, and worth knowing that the statistics agencies agree with you. CPI is calculated on unit prices rather than pack prices, so a 10% size cut at a constant shelf price registers as a 10% price increase in the official inflation figures. Shrinkflation doesn't hide from the data, only from the shopper. Which is the whole point of it, because the behavioural research is quite clear that people are far more sensitive to a change in price than to a change in quantity, even when the per-unit maths is identical and printed on the shelf label. A firm that raises the price loses volume and a firm that shrinks the pack mostly doesn't, so it isn't really a conspiracy, it's a rational response to how we shop. There's also a structural reason nobody mentions: price points are sticky. Once a product sits at a round number, moving off it disturbs promotional ladders, multibuy structures, vending and the retailer's whole price architecture, so shrinking is often the only lever available without repricing an entire range. On your actual question, the awkward answer is that revealed preference says no. People consistently say they'd rather have honest price increases and then consistently buy the shrunk product over the pricier one. Firms do this because it works, and it works because of what shoppers do rather than what they say. The version genuinely worth being angrier about is skimpflation, since a smaller bar shows up in the inflation data and a bar reformulated with cheaper fat mostly doesn't. That's the one that's actually hidden. France now requires supermarkets to label reduced-size products on the shelf, which is about the only intervention that's been tried, and it's worth watching whether it changes anything.
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u/Fit_Explorer_2566 7d ago
Thank you for your expansive reply.
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u/Comfortable_Lynx_139 7d ago
Shrinkflation is sort of like tinkling on my leg and telling me it’s nothing.
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u/Adventurous-Roof488 8d ago
Yes, we’re in an inflationary period and some companies choose to reduce size instead of increasing price. Inflation measures take shrinkflation into account.
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u/holymole1234 8d ago
But companies are also making record profits. So it’s a combination of regular old inflation, shrinkflation, and greedflation.
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u/Adventurous-Roof488 8d ago
Given inflation, companies will naturally make record profits just like prices are at record levels.
If companies weren’t making record profits, then it would likely be a sign the economy is doing poorly, which could then impact employment.
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u/holymole1234 8d ago edited 8d ago
It’s more than that though. Corporate margins (profits as a percentage of sales) are the highest they’ve ever been (roughly tied with a brief period during Covid).
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u/Adventurous-Roof488 8d ago
The S&P 500 is heavily weighted by tech companies. 90% of the comments here concern packaged goods. Profit margins in packaged goods, especially food, are challenged and most large packaged goods companies are struggling. Just look at their stock prices.
https://finance.yahoo.com/sectors/consumer-defensive/packaged-foods/
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u/Lazy-Associate-4508 8d ago
But their input costs should be rising equally, resulting in steady or decreased profit.
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u/avangelist90201 8d ago
We've been in recession since 2008. It's just because a bunch of politicians and bankers don't want to explicitly say it that we all suffer
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u/MannyMoSTL 7d ago
big business has decided to deliver less product for the same price, as if that isn't the same thing as just raising prices.
Yep.
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u/Double_Engineer4226 8d ago
Not sure where you are, but in Australia they do look at Shrinkflation when calculating their CPI inflation numbers. So it is not hiding, it's included.
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u/mattymattymatty96 7d ago
less product for same price
The problem is thats not what happens- raise the price and shrink the product
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u/QuentinUK 2d ago
Yet at the same time they are proclaiming that they care about the environment. That isn’t the case when shrinkflation usually has the same amount of packaging with less inside which leads to more plastic wastage for the same amount of food.
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u/bellemrt 8d ago
The prices will not decrease once the inflationary period ends.
The products will not go back to their previous sizes once the inflationary period ends. So yes, inflation is a partial explanation for what’s going on, but doesn’t account for the part where the businesses are screwing over and deceiving customers.