Skimpflation — the hidden cost you cannot measure
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Illustration: Lindsey Bailey/Axios
In the era of high prices, shrinkflation is well known — but its lesser known twin is sneakier and more insidious.
Why it matters: While the former reduces a product's quantity, skimpflation compromises quality, mainly because costs are higher (thanks inflation!) as the price stays the same.
Between the lines: Skimpflation, or "skimping," as the St. Louis Federal Reserve puts it, is almost never quantifiable.
- Quality changes are seldom communicated to consumers and are harder to detect, especially in products like toilet paper rolls and laundry detergents, Edgar Dworsky, founder of Consumer World, told Axios, who tracks and posts the fine print of product changes on mouseprint.org.
- His recent findings about Wish-Bone Italian salad dressing showed over 22% reduction in oil content, seemingly replaced with water, and over 30% increase in salt.
- Conagra, which makes the dressing, did not respond to Axios' requests for comment.
Zoom out: Skimpflation affects both products and services by lowering quality or reducing staff.
- For example, restaurant diners can experience longer wait times, while travelers only get hotel housekeeping services upon request. Also the rise of self checkout registers at grocery stores is another form of skimping.
What they're saying: "Nobody's collected data that shows the extent of this issue so I don't think it necessarily means that firms are hiding this," Joseph Balagtas, Purdue University associate of agricultural economics told Axios.
Flashback: The economy is certainly no stranger to the skimping effect, which has reared its head during tough economic times.
- Piggly Wiggly was the first self-service supermarket in 1916 to practice skimpflation.
- Later in World War II, businesses switched to cheaper alternatives to maintain profitability when they couldn't legally raise prices.
The bottom line: As companies combat inflation, the consumer often bears the burden, but this hidden cost can ultimately harm businesses, particularly those with a loyal customer base.
