Contact us
CALL US NOW 1-888-GOLD-160
(1-888-465-3160)

Shrinkflation: Robbing Us Quietly in Back Alleys

  by    0   1

Inflation robs you of purchasing power by driving up the price of everything you buy. You see the impacts of inflation every time you go to the store. But sometimes inflation hits you in a more subtle way that’s difficult to see – through “shrinkflation.”

I experienced shrinkflation first-hand last weekend.

Inflation-driven rising prices don’t just hit consumers. In fact, they typically impact producers first. As the cost of materials, labor and equipment goes up, companies feel the pinch. Eventually, they pass those costs on to their customers.

But raising prices is bad for business, so sometimes, companies find other ways to cut costs. They shrink packages or simply put less stuff in the same size box. While the price stays the same, you get less product.

Shrinkflation doesn’t show up in the CPI and consumers often don’t even notice, but the effect is the same as rising prices. You ultimately end up with less stuff.

It is stealth inflation, robbing you of purchasing power in a back alley.

MY BRUSH WITH SHRINKFLATION

Last weekend, my wife and I took an overnight trip and stayed in the same hotel as we did on a trip to the same place almost exactly one year ago. Surprisingly, the room rate was within $10 of last year’s price. But the hotel is clearly trying to find ways to cut costs.

Check out the soap.

The package on the left was the soap on the bathroom counter a year ago. My wife brought the soap on the right home from this year’s trip.

That’s shrinkflation.

You’ll notice that last year’s soap is called a “Body Bar.” This time we got a “Cleansing Bar.” The hotel now opts for a smaller, and presumably less expensive, soap version.

The bottom line is we paid the same for our room and got less for our money.

That’s shrinkflation.

Sure, it’s not really that big of a deal when we’re talking about soap, but shrinkflation is rampant out there.

MY FRIEND’S SHRINKFLATION EXPERIENCE

Just today, a friend of mine had his own run-in with shrinkflation. Here’s how he described it in a Facebook post.

Today I picked up a new Kentucky license plate for the Jeep. The plate they handed me felt more like plastic than metal, was thinner than usual, and no longer had the raised letters and numbers of the past. This, in a vacuum, would be unconcerned.

It’s part and parcel of a larger picture though.

The devaluation of the dollar manifests itself everywhere in ways we don’t even expect or measure. The consumer price index measures inflation charitably by allowing, at their discretion, for the use of substitute goods and services to offset price increases. There are no aggregate metrics to account for the decrease in quality of goods, for shrinkflation, and the precipitous declines we’re experiencing in the quality and formerly personal nature of important services.

MORE EXAMPLES OF SHRINKFLATION

MousePrint.org chronicles shrinkflation. Here are some recent examples.

  • Betty Crocker Cake mixes were downsized to 15.25/oz some time back and recently shrunk again to just 13.25/oz — a full five ounces less than the original. The boxes are identical in size.
  • A package of Farm Rich Mozzarella Bites went from 20 ounces to just 15. But the bites are now bigger — but with fewer calories per serving. What’s going on here? A closer look at the front panel reveals they changed the serving size from four bites to just two now.
  • The Quilted Northern Ultra Plush variety has gone from 284 sheets down to 255.
  • Hill’s Science Diet “Perfect Weight” dog food decreased their package weight by 2.5 pounds.

We also see shrinkflation in services. Remember full-service gas stations? Now, we pump our own gas, bag our own groceries and manage our own investment portfolios.

The inflation tax is insidious and relentless. My friend in Kentucky summed it up nicely.

The equity in our humanity is being harvested, borrowed against, and shipped to many whoms and elsewheres more politically expedient. Out here in the Districts it’s pert near omnipresent.”

401k IRA Rollover Free Report

Get Peter Schiff’s key gold headlines in your inbox every week – click here – for a free subscription to his exclusive weekly email updates.
Interested in learning how to buy gold and buy silver?
Call 1-888-GOLD-160 and speak with a Precious Metals Specialist today!

Related Posts

Revitalizing Public Transit Through Privatization

Across America’s cities, the inherent flaws in public transportation are becoming all too apparent. There are few urban residents who have no qualms with their public transit system. From aging infrastructure, budgets that struggle to cover costs, and a noticeable decline in ridership, there’s a growing argument for the privatization of transit infrastructure. This move […]

READ MORE →

Property Tax and the Death of the American Dream

While the primary catalyst for the original English pilgrims to venture to America was religious freedom, a strong desire for independence followed closely behind. They desired to be independent of two things: poverty and government meddling. This spirit carried into the American Revolution and informed domestic policy for many years. The Homestead Act of (FIND […]

READ MORE →

U.S. Is “A Few Short Years” From Data Reliability Crisis, Study Warns

U.S. economic data is hitting headlines yet again—this time, due to serious concerns about its continued reliability. “Federal statistical agencies face increasing challenges to their ability to produce relevant, timely, credible, accurate, and objective statistics,” researchers of the American Statistical Association revealed. “Immediate action is needed to put the agencies … on a firmer footing […]

READ MORE →

The Yield Curve & Christine Lagarde Agree — Don’t Expect A “Soft Landing”

An inverted Treasury yield curve has historically been associated with economic downturns, preceding every recession since the late 1960s. Earlier this year, it set a new record for remaining inverted for more than 624 days, which was the 1978 record.

READ MORE →

The Degenerative Disaster of Medicare

In 2023, the U.S. spent 1.04 trillion dollars on Medicare, which is over $3,000 per citizen. For an inefficient, problem-ridden program, that number is difficult for Americans to stomach.

READ MORE →

About The Author

Michael Maharrey is the managing editor of the SchiffGold blog, and the host of the Friday Gold Wrap Podcast and It's Your Dime interview series.
View all posts by

Comments are closed.

Call Now