Inflation is never a fun topic to talk about—especially when you’re struggling to make ends meet because the cost of goods keeps going up while wages struggle to keep pace. So, it often feels like a relief when certain product prices remain the same or only increase a little bit.
But sometimes that bag of chips doesn’t seem quite as big (or full) as you remember it being just a few months or years ago. Well, it might not be your imagination. In fact, it might be something called 'shrinkflation'.
Let’s talk about shrinkflation—what it is, how to spot it, and what you can do to account for it in your budget!
What Is Shrinkflation?
Shrinkflation happens when product sizes shrink without the price of the product decreasing, which is a fairly common practice during times of intense economic inflation.
If you aren’t keeping an eye out for it, shrinkflation can be really difficult to spot. As our CEO, Bruce Sellery put it in an interview on Breakfast Television, “The changes are designed to be imperceptible, but they really matter and they’re happening more and more now.”
For example, a 750 mL bottle of your favourite sports drink that sold for $2.50 a couple of years ago might still sell for the same price now, but there's actually only 710 mL of fluid in the bottle. The shape of the bottle might have changed to make it slimmer in the middle, so the bottle holds less liquid, but the update might get marketed as an “improved grip” design. Or a $3 bag of chips might go from having 368 grams of chips in it to 311 grams without the actual size of the bag changing.
From toiletries to food, school supplies, and more, there are countless examples of shrinkflation in product packaging if you look for them.
Why Does Shrinkflation Happen?
Shrinkflation happens for many reasons, including the cost of raw materials going up, increased production costs, or even higher shipping costs.
For example, when the price of gas increases significantly it naturally increases the cost of shipping since it takes more money to purchase the fuel necessary to move goods across the country.
When the price of different goods and materials increases, companies find ways to offset those increased costs. One way they can do this is to increase the cost of their products without changing their size. However, this runs the risk of pushing the price point of their products beyond what consumers can safely afford. (Who wants to pay $8 for a box of cereal?) So instead, some manufacturers reduce the amount of product they sell while maintaining the same price point.
Tips for Dealing with Shrinkflation
When you’re paying the same for less because of product downsizing, it’s important to find ways to make your budget stretch further since every dollar you have will now get you less than before.
Here are a few simple tips for dealing with shrinkflation and getting more when popular brands are offering reduced product sizes:
1. Learn How to Spot Shrinkflation in Product Packaging
The first step in dealing with any problem is learning to recognize it. In the case of shrinkflation on food items, it’s often easy to spot by taking a close look at the product packaging and reading its unit weight.
Consumer packaged goods must display a “net quantity declaration” on most food products—and in specific units of measurement, too. For example, liquids must be measured by volume in milliltres or litres (if over 1,000 millilitres). Solid foods must be measured by weight in grams or kilograms. Certain other food items must be measured by count.
While there are some exceptions, the majority of products on the shelf need to declare on the packaging how much food is contained in the package.
Comparing the net quantity declaration label of different products and keeping an eye on them over time can be a great way to identify shrinkflation when it happens.
2. Dare to Compare Products by Unit Price
If you haven’t been paying close attention to how much product is in your favourite brands' packaging, what can you do to spot shrinkflation and save money on groceries or other necessities?
One thing you can do is to start comparing products by their unit price—how much they cost per unit. For example, say there are two bags of chips on the shelf with two different price points and weights. Normally, you might go with whichever brand you’re already used to, or whichever one costs less.
However, before putting that bag of chips in your cart, take a quick look at the price tag on the shelf. For most products, there should be a unit price on the tag that lets you know how much money you’re spending per millilitre, gram, or individual item in the package.
If one bag of chips has a unit price of 0.0082/gram while the other has a unit price of 0.0096/gram, then you know you’re getting a better deal with the first bag of chips since it costs less per gram—even if the price for the whole bag is the same or slightly higher because you're getting more chips for your money.
Comparing unit prices can be a great way to know exactly how much you're getting for your money and whether you need to accommodate your budget (pay the same or more for less product) or your shopping choices (choose a different brand that gives you more product for less money).
Don’t see a unit price on the shelf? Don’t worry! You can calculate the unit price of a product by dividing the price by the unit measure of the product. For example, if you see a bag of chips that costs $3 and weighs 368 grams, the unit price would be approximately $0.0082/gram ($3 divided by 368 grams).
3. Leverage Extreme Couponing to Stretch Your Shopping Budget
Using coupons when you’re shopping can be a great way to reduce how much you spend on groceries and household goods. However, it can be difficult to coupon effectively.
When you let coupons dictate your shopping list, it can be easy to justify spending money on things you would never normally buy simply because it’s a good deal and you have a limited time to redeem them—generating a “fear of missing out” (FOMO) that actually increases your spending.
However, by following a few simple couponing tips for Canadians, you can make your shopping dollars stretch a lot further despite product downsizing by some manufacturers.
Some of these tips include:
- Look for Coupons on Items You Purchase Frequently. If you find a coupon for something you know you buy all the time, go ahead and add it to your coupon book! Just avoid adding coupons for things you know you don’t need or won’t use.
- Combine Coupons with Sale Items. If the store allows it, you may be able to combine your coupon with the sale price of an item to make it even more affordable than you could with the coupon or sale alone.
- Stack Your Coupons. Coupon stacking is when you use multiple coupons on one item—such as using both a manufacturer coupon and a store coupon at the same time. However, not all stores allow coupon stacking. When that's the case, pick the best coupon available and use that one!
- Separate Necessary and Unnecessary Items. Just because you have a coupon for something doesn’t mean you have to get it. Before you go shopping, consider separating your shopping list between necessary and unnecessary items to help you stay under budget. This way, if you're at the check-out counter and you start to panic at the sight of your climbing grocery bill, you quickly eliminate some unnecessary items. This kind of pre-planning can be a good way to break some bad spending habits!
- Use Coupon or Shopping Apps to Find Deals and Comparison Shop. There are shopping and coupon apps that you can download to your smartphone to help you hunt down local coupons and deals on specific items. Leveraging these apps can do a lot to help you stretch out your shopping budget—but the same cautions still apply, like avoid buying unnecessary items just because they’re on sale.
4. Adjust Your Household Budget to Account for Smaller Product Sizes
If you track how much product is in each package you purchase, consider using that information when you’re setting your household budget.
For example, if you know your favourite toilet paper brand has shrunk its toilet paper roll size, you may need to budget for slightly more toilet paper each month. This might not be a huge amount considering that one large package of toilet paper is usually enough to last a while, but it does add up over time.
If you know you are getting less product, then you also know that you will run out of the product faster and will have to purchase it more frequently, unless you adjust your usage.
5. Look for Alternatives to Popular Brands
When shopping for a good deal and trying to save money, it may be best to stop reaching for the big-name brand on the shelf and start looking for low-cost alternatives that are often just as good but far less costly per unit.
Many national chain stores have store-brand equivalents of popular products that look, feel, or taste nearly the same (if not exactly the same) as the brand-name products you know, but aren’t quite as costly.
Of course, it’s important to double-check the unit price of the store brand product, too—just in case they’re engaging in some shrinkflation!
Need Help with Managing Debt?
Are you struggling with debt caused by unexpected cost increases, shrinkflation, high-interest rates, or other financial hurdles? Credit Canada is here to help. Our knowledgeable credit counsellors have years of experience in helping people by providing actionable advice and guiding them to the resources they need to conquer debt.
We have helped thousands of people get out—and then stay out—of debt, and we want to help you, too! Reach out to Credit Canada today to get started!