Inflation has driven prices maddeningly high and hidden fees have squeezed consumers for a few extra dollars at the last minute. While we scour our receipts deciphering what products are more expensive and what fees were tacked on after tax, we are missing something equally as important. Was your last order of fries missing a few and was that bag of chips you bought a little bit lighter? Yes, in many cases we are getting less for the same price. Shrinkflation is the sneaky way to raise prices without scaring consumers away with sticker shock. It’s at the grocery store and that restaurant down the street and it is costing us more than we know.

The frequency of severe price hikes has left consumers weary, though no less vigilant against them. In the early days following the pandemic, it could be argued that people were understanding of the difficult circumstances and were willing to pay a little more for their favorite products. Whatever goodwill that existed then is long gone and current prices can feel like a rip-off. Consumers have pushed back at higher prices and companies have started to catch on. There is a fear that higher prices could scare people away and lower volume will eventually outweigh increased profits. We know that traffic at restaurants is down, and higher prices are a major reason why. Turning to smaller portion sizes seems like a viable alternative as long as consumers don’t catch on.

Shrinkflation is an easy way for businesses to cut costs without too much visibility. However, this change is becoming more noticeable, and companies are owning up to the practice. Shrinkflation can come with a change of packaging that disguises the fact that the amount of product inside is less. In the case of things like cereal, the box actually gets bigger with less cereal inside. In other examples, the packaging may not change at all and only by reading the net weight of the item could you determine a change has taken place. For restaurants, they reduce the number of items in a meal deal or shrink the size food like chicken tenders or fries. The changes are subtle, yet they reduce the value of products despite price staying the same. Some companies have gotten out in front of this change and informed consumers about why they did it. This move could buy them some loyalty, yet it also increases the microscope on inflation at large. The other approach is to say nothing, and hope consumers don’t notice or don’t care. This method makes it harder to track shrinkflation, although it could backfire if prices are to be raised alongside the shrinking product.

Consumers are looking to save every penny they can right now. With prices rising everywhere, options are limited and major cutbacks on everyday items are potential possibilities. Conversely, companies are looking for ways to improve profits and price hikes, additional fees, and smaller products are all on the table. Consumers don’t like to be deceived, especially when things are tough financially and shrinkflation is an effective method to make people feel like they are still getting a deal. Something will have to give, and the average consumer will not put up with shrinking for long. If shrinking products backfire and companies have to pivot, where will they go next to save on costs?