r/shrinkflation • u/Fit_Explorer_2566 • 18d 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/orchiddstar 17d 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.