Your Cheerios box is shrinking
One way companies are raising prices is by reducing the package sizes — without lowering the cost, what's known as "shrinkflation."
Why it matters: Analysts expect the practice to impact more products as companies pass down their higher costs, a consequence of pandemic-driven supply and logistics constraints.
Driving the news: Companies like Kimberly-Clark, Scotts Miracle-Gro, Procter & Gamble and General Mills have said they would raise prices this year, but it’s not exactly clear how much of that will come in the form of shrinkflation.
- What is clear: Consumers do notice.
Whether it’s Family Size Cheerios in two different sizes, one fewer bag of M&Ms in a multipack, smaller Scott Shop towels or shrinking salads at Walmart, the shrinkflation subreddit is filled with recent posts complaining about camouflaged price changes.
- The site Mouseprint, run by a former Massachusetts assistant attorney general, published photos in May of two Doritos bags that look identical but are half an ounce different.
What they’re saying: "The majority of the portfolio has been through the changes," General Mills spokesperson Kelsey Roemhildt told Axios in response to a query about its products shrinking in size.
- Roemhildt said she couldn’t share more details when asked how many of the company's products experienced downsized packaging this year.
The intrigue: Not everything has shrunk, but these trends and prices tend to stick.
The bottom line: Twelve-month inflation expectations are at their highest levels since 2013, the pace of which the Federal Reserve says is largely temporary due to supply constraints.