One Way Companies are Concealing Higher Prices: Smaller Packages


The Washington Post | June 1, 2021


Consumers are paying more for a growing range of household staples in ways that don’t show up on receipts — thinner rolls, lighter bags, smaller cans — as companies look to offset rising labor and materials costs without scaring off customers.


Economists and consumer advocates who track packaging expect “shrinkflation” to become more pronounced as inflation ratchets up, taking hold of such everyday items such as paper towels, potato chips and diapers. Such cutbacks typically coincide with economic downturns, when shoppers tend to be more mindful of cost. Similar product shrinkage occurred during the 2008 recession.


“Most people know more or less what a box of cereal — or a container of ice cream or a package of coffee — should cost,” said Gourville of Harvard. “But ask them how much is in a box, and they’re relatively clueless. That’s not something they pay attention to.”


Kimberly-Clark has said it will raise prices on Scott toilet paper, Huggies diapers and other everyday goods by 4% to 9%. Scotts Miracle-Gro will follow suit this summer, while Procter & Gamble, the maker of Pampers and Tampax, has said it will mark up prices in September. “Every raw material we’re buying right now is at a materially higher cost than we planned,” James Hagedorn, chief executive of Scotts Miracle-Gro, said. “Distribution costs are higher, too. So we’re going to do what we need to … to keep our business healthy.”


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