Inflation isn’t under control at all – it’s now Shrinkflation – ‘Shrinkflation: Robbing Us Quietly in Back Alleys’

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Less quantity for same price = direct inflation.

Lower quality for same price = indirect inflation.

Inflation is far from being under control.

Everywhere, everything is shrinking in size.

Who knows what the annual Shrinkflation rate is? It seems to be quite substantial.

Shrinkflation: Robbing Us Quietly in Back Alleys

NOVEMBER 22, 2023 BY MICHAEL MAHARREY

Inflation robs you of purchasing power by driving up the price of everything you buy. You see the impacts of inflation every time you go to the store. But sometimes inflation hits you in a more subtle way that’s difficult to see – through “shrinkflation.”

I experienced shrinkflation first-hand last weekend.

Inflation-driven rising prices don’t just hit consumers. In fact, they typically impact producers first. As the cost of materials, labor and equipment goes up, companies feel the pinch. Eventually, they pass those costs on to their customers.

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But raising prices is bad for business, so sometimes, companies find other ways to cut costs. They shrink packages or simply put less stuff in the same size box. While the price stays the same, you get less product.

Shrinkflation doesn’t show up in the CPI and consumers often don’t even notice, but the effect is the same as rising prices. You ultimately end up with less stuff.

It is stealth inflation, robbing you of purchasing power in a back alley.

MY BRUSH WITH SHRINKFLATION

Last weekend, my wife and I took an overnight trip and stayed in the same hotel as we did on a trip to the same place almost exactly one year ago. Surprisingly, the room rate was within $10 of last year’s price. But the hotel is clearly trying to find ways to cut costs.

Check out the soap.

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The package on the left was the soap on the bathroom counter a year ago. My wife brought the soap on the right home from this year’s trip.

That’s shrinkflation.

You’ll notice that last year’s soap is called a “Body Bar.” This time we got a “Cleansing Bar.” The hotel now opts for a smaller, and presumably less expensive, soap version.

The bottom line is we paid the same for our room and got less for our money.

That’s shrinkflation.

Sure, it’s not really that big of a deal when we’re talking about soap, but shrinkflation is rampant out there….

 

AC