This story is part of Inflated Expectations, a Modern Retail series about the impact inflation is having on brands and retailers.
When Richard B. ran into a California Walgreens on a recent hot afternoon, he quickly grabbed a Cool Blue Gatorade to quench his thirst.
At first, the slim 24-ounce bottle didn’t seem out of ordinary, he told Modern Retail. But on second look, “I noticed it was strangely small for the three-ish dollars I paid for it,” he said. The bottle was slimmer, a far cry from the classic chunky 32-ounce bottle he was used to. On Twitter, he called out companies like Gatorade for using “child psychology” to get away with shrinkflation.
Richard told Modern Retail that he’s in a comfortable income bracket, so small purchases like that don’t affect his overall habits as they would a lower-income family. “But I just think it’s dishonest that big companies are shrinking products and charging more, all while using psychology to get away with it,” he said.
The packaging phenomenon is known as shrinkflation. It’s a tactic that’s been used for decades by brands, especially during recessions to improve their margins not by raising prices, but by shrinking package sizes instead. But since the last recession, people now have more ways than ever to call out corporations for what they view as a greedy tactic designed to offer customers less for more money. Hundreds of social media posts, and a slew of online coverage are particularly helping document the current wave of shrinkflation, with users posting photographic evidence of shrunken package sizes. There is even an entire subreddit, r/shrinkflation, dedicated to calling out brands’ before and after portions, that has accumulated more than 37,000 members. Meanwhile, the hashtag #shrinkflation has become more popular in the past year on Twitter and Instagram.
Indeed, PepsiCo was honest in its latest earnings about using smaller formats, done to strengthen margins and cut costs. And PepsiCo is hardly the only CPG giant doing it. From Doritos to Wheat Thins to Pampers, many grocery brands are shrinking on shelves. Even family-size packets are being impacted, with General Mills reducing its family-size cereal boxes by 10% last year — from 19.3 ounces to 18.1 ounces.
Shrinkflation takes over social media
Retail data firm 84.51°’s August Consumer Digest found that shoppers are noticing the top shrinking pack sizes to be among chips (51%), cereal (37%), candy bars (29%) and toilet paper (26%).
Shrinkflation not only means people are getting less bang for their buck, but it also can make life more difficult for some shoppers. Some members of the WIC [Women, Infants, Children nutrition] program report that the changing SKU sizes are making it more difficult to get certain items covered.
One Alaska-based WIC user, who spoke to Modern Retail on condition of anonymity, said she recently faced a shrinkflation-related example of this in the refrigerated juice section. In her state, WIC allows for 64-ounce cartons of refrigerated orange juice. She had long bought the generic store brand, but it had frequently been out-of-stock over the last few months, so she hadn’t bought it in a while. “When they finally came back into stock, they were now 59 ounces with an entirely new UPC [Universal Product Codes] so they’re no longer covered by WIC.” To date, this issue hasn’t been resolved even through customer service.
These changing sizes have made grocery shopping “just a little harder” for the busy mom. “I got used to learning which specific items are covered to make shopping a little faster, but the changes of sizes and coverage is a curveball that slows things down,” she explained. “Sometimes, this results in waiting at the customer service counter to return items I noticed didn’t get properly covered.”
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Over on the r/shrinkflation subreddit, corporations are being called out not only for shrinking sizes, but any host of tactics designed to charge customers more for less. One user recently bemoaned a tortilla chip bag that only came half-filled with chips. “Can’t even use the bathroom without seeing it now,” another user wrote, posting a picture of a wet wipes container that used to come with 40 tissues, and now only holds 35.
One active member on the subreddit, who asked to go by his first name Joel, told Modern Retail that he thinks it’s important for shrinkflation to be called out because, “I love to see companies not getting away with the shitty behavior of trying to do less in order to earn more.” He added, “Shrinkflation is just a sign of companies doing what they’ve always been doing: maximizing profits.”
A growing area of risk for brands
Molly Burke, senior retail analyst at Capterra, a Gartner Digital Markets company, said that even compared to the Great Recession, shoppers are on high alert for signs of corporate greed, including shrinkflation, and go to social media to loudly voice their concerns.
Whereas shrinkflation may have flown mostly under the radar during the last recession — when social media channels like Reddit and Twitter were in their infancy — “customers who now have access to TikTok and Instagram can cause instantaneous reputation damage to a brand,” Burke said.
“You don’t want to be remembered for making a difficult period of inflation worse for customers,” Burke said. One way brands can prevent social media backlash is by being up front about the changes they are making to products and services, she added. A recent example of this was the wave of price increases a number of brands informed their customers about ahead of time.
But even when brands are being upfront, more often than not “consumers perceive shrinkflation as cheap and sneaky,” Burke said.
Charles Haverfield, packaging executive at packing supplier U.S. Packaging and Wrapping, said historically, “buyers are more sensitive to changes in price than to changes in quantity.” And so some subtle shrinkflation is used to keep prices the same in order to retain customers.
However, with a historic inflation rate, that’s no longer the case — and many shoppers are becoming even more frustrated when faced with examples of shrinking product sizes. “It’s part brand image and part a moral issue,” Haverfield said. “Companies have to decide how obvious they want to make new changes when they’re not obliged to advertise them.”
Overall, offering smaller sizes for the same — or often at higher prices — “is worsening the consumer experience in my opinion,” Joel said. “It’s just a disgrace.”