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'Shrinkflation' hits consumers as food producers cope with costs

2 On Your Side took a closer look at what some experts are observing and how consumers may want to try to deal with it.

BUFFALO, N.Y. — It's hard to escape all the talk about inflation and higher prices in recent months, but there is another retail trend out there in store aisles called "shrinkflation."

2 On Your Side took a closer look at what some experts are observing and how consumers may want to try to deal with it.

While cruising through the grocery store or a favorite retailer, you may not realize they're fighting a battle over less is more, or more is less, or is it the same?

Because as the cost of production for raw materials, food sources, and especially transportation, from farm to factory to store, has gone up with fuel prices, the actual product count in those packages may be smaller with shrinkflation. 

Dr. Patrick Penfield, who is a Professor of Supply Chain Management at Syracuse University, says certain products may be using this technique more than others.

"I'd say ice cream manufacturers, that's probably one. Cereal. Any of your snack foods seems like they're really kind of taking advantage of the particular situation," Penfield said.

2 On Your Side asked if this is kind of a backdoor approach to raising prices for consumers.

"It's a little sneaky. Yes," Penfield said. "So this is the dilemma. Nobody is announcing that they were shrinking your packaging, and you're still going to be paying the same price, so that's one thing that kind of gets consumers.

"Also it's that, 'Oh, this isn't the same size I'm accustomed to.' And you're right, it's not. And it's because, in their defense, they are seeing an increase in ingredient prices, fuel prices, and labor. So again, they're trying to protect their margin, and I guess I understand that."

Actually, Niagara University professor James Kling says smaller packages may be easier and less expensive for transport, with more packaged product on a pallet in a warehouse.

Then again, for pinched store profits Penfield points out, "For the most part, I think most of them are just trying to figure out, again, what will consumers accept as far as prices going up. That's the other dilemma. If you increase prices too much, then consumers will go to another brand."

So we asked, is anything consumers can do to be aware?

"Look to see what you're buying," Penfield said. "You might want to compare it to maybe a house brand to see again if it's similar in size. I think that's a hard part for a lot of consumers, that we really don't notice the ounces on the package. We're just accustomed to taking, you know, basically that box we've been buying for 20 years, and not noticing you know what actually is the size of the box."

Also, again, check the item count or weight, which is usually in ounces on the packaging label.

As for overall inflation, professor Penfield says in an educated guess that prices may start backing down a bit in the fall with less driving demand for gasoline and maybe diesel fuel. He says that most observers know that fuel drives the economy.


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