Shrinkflation is Real — Here's What Shrunk the Most

Inflation. We all have to adjust our budgets, priorities, and expectations when confronted with inflation. Businesses like consumer packaged goods (CPG) companies are no exception. One business practice that CPGs have implemented to mitigate the cost increase of resources is shrinkflation — or in other words reducing the size or quantity of a product while keeping the price the same or increasing it slightly.  

The cons to shrinkflation

However, according to a study by LendingTree, a prominent online loan marketplace serving US customers, 71% of consumers have noticed instances of brands using shrinkflation and 66% of those individuals have since proceeded to boycott the specific product.

According to Matt Schulz, LendingTree’s chief credit analyst, the data gathered offered a clear message: “People prefer higher prices to shrinkflation. That's definitely not to say that people are happy when prices rise,” he says. “However, they'd rather have a company be upfront about rising prices than have that company try to pull one over on them. And that's what people think about shrinkflation.”

Schulz goes on to explain that when consumers realize a company is engaging in shrinkflation, it can feel deceptive and insulting, resulting in a breach of trust. It would then be logical to conclude that though raising prices is a risky move for CPGs, shrinkflation may be even more so.

And yet, a third of the 98 products investigated in LendingTree’s study have used the tactic of shrinkflation to compete in today’s market.

Data reveal top brand weight losers and price gainers.

2,040 US consumers were surveyed and 98 products were chosen for the study based on LendingTree’s ability to find their prices in 2019 and 2020 using the Wayback Machine at Walmart.com. This limited the number of products available for the study, according to Schulz, as well as LendingTree’s self-imposed limitations of choosing “everyday” consumer products and avoiding seasonal and occasional use items.

Results were broken-down into categories: household paper products, breakfast foods, candy, snacks, and other consumable products. Each category saw some degree of shrinkflation.  

The household paper product category saw the highest rate of change with 12 of 20 (or 60% of) products dropping in size. Angel Soft’s 12 mega roll toilet paper leads this category, having decreased from 429 sheets to 320 sheets while the price per 100 count increased by 13.5%, says the study.

While household paper products experienced the most change in the percentage of products that have been shrunk, they are far from experiencing the highest price increase among shrinkflated items. The item that’s won first place for price increase is party-size Cheetos which have a 14.3% size decrease and a 135.3% price per ounce increase.

Candy is likely the category that saw the most consistent high price increases. The shrinkflated products range from 6.3% to 11% size drops with 61.9% to 68.2% price per ounce increases. While it’s true the price per ounce for candy has generally increased significantly across the board, none increased as much as the items that also dropped in size, according to the data used in LendingTree’s study.

Lastly, 43.8% of breakfast items downsized as of 2019 or 2020 with the family-size Frosted Flakes in the lead with a 9.6% size decrease, though with only a 40% price per ounce increase. Raisin Bran saw the largest price per ounce increase at 53.3%, while dropping 7.9% in size, with Cinnamon Oat Crunch Cheerios and Great Value Old Fashioned oats right behind it at a 50% increase and slightly smaller size drops.

Read more articles on shrinkflation here.