The small things matter. Small in this case meaning the quantity in a package. In case you haven’t noticed lately, prices are going up and contents are going down.
If you’re not sure about this, consider the new sizes of common household products such as toothpaste and toilet paper. Example: A Crest toothpaste once contained 4.1 ounces of teeth-whitening product, but now contains 3.8 ounces. Gatorade was 32-ounces, but not it is down to 28 ounces. And (in case you are counting sheets) a roll of Cottonelle toilet paper has shrunk to 312 sheets, compared to its former count of 340 sheets.
Meal portions at restaurants have also been impacted. At Subway restaurants, the chicken wraps and sandwiches have less meat now. Domino’s Pizza reduced the order size of boneless wings to 8 pieces from the usual 10 pieces. Burger King is also downsizing its nugget meals from 10 to 8 pieces. What is going on?
At first glance none of this seems too alarming, but this movement is called “shrinkflation” and tends to not retreat once implemented. Shrinkflation is when manufacturers cut down on the product size or volume in a package, rather than raising the price on the customary size. This happens during times of increasing raw materials and supply chain cost increases. It’s not illegal, but it does seem a little sneaky. And, once the new sizes and prices have been accepted, new standards are in place for consumers and their wallets.
Are your foods shrinking?
Group Activities and Discussion Questions:
- Poll students: What have they observed in their purchases? Are the sizes or prices the same?
- Show video about shrinkflation: https://youtu.be/q13_06F4_HI
- Discuss why manufacturers are making these changes. What are the reasons?
- How is shrinkflation accounted for in pricing?
- Discuss various pricing models: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
- Which pricing model is being used with shrinkflation?
- Offer an outside assignment for teams of students. Have them visit a local store and examine products that illustrate shrinkflation.
Sources: Patton, L. (12 May 2022). Fewer nuggets, smaller salads: Shr9inkflation hits U.S. Restaurant Diners. Bloomberg.; Skores, A. (16 May 2022). Inflation up, product size down. Dallas Morning News.; other news sources.