Redflation: what happens when groceries weigh less and cost the same


Grocery shoppers are noticing something strange. Chip bags filled with air. Soup cans that have shrunk. Smaller detergent packets.

Companies are downsizing their products without cutting prices, and consumer comments from Reddit to TikTok to The New York Times comments section are brimming with outrage over this trend, known as reduffling (contraction in English).

The practice is not new. Retailers have been quietly reducing products to avoid raising prices for centuries, and experts believe it has been an obvious corporate strategy since at least 1988, when the Chock Full o’Nuts brand reduced its coffee pot from 455 grams to 368 grams and its competitors followed suit.

But the outrage today is more pronounced. President Joe Biden echoed the anger in a recent video. (“What makes me most angry is that ice cream containers have decreased in size, but not in price,” he lamented). The companies themselves exploit this practice with publicity tricks. A Canadian chain introduced a pizza. growth inflation . (“In pizza terms,” the company’s press release joked, “a bigger slice.”)

But how does redflation work from an economic point of view? Is it happening more frequently in the United States and, if so, does it mean that official data does not reflect the true extent of inflation? Below we explain the trend and what it means for your pocket.

It may be hard to believe, but redflation seems to be happening less frequently today than it was a few years ago.

U.S. government adjusts official inflation data to account for shrinking product sizes, and data collectors monitoring size adjustments find fewer cases of shrinking in household and grocery items in 2023 than a few years before.

The reduction was frequent in 2016, when general inflation was low. It became rarer after the start of the pandemic in 2020, and more recently has begun to return to pre-pandemic levels, according to analysts at the Bureau of Labor Statistics. (Economists note that the set of products that are measured has changed somewhat over the years, making comparisons over time more of an approximation than an exact science.)

Although size reductions don’t happen as frequently, downsizing is having a big impact on some key categories, such as candy, detergent and toilet paper.

From 2019 to 2023, redflation added about 3.6 percentage points to inflation for products such as paper towels and toilet paper, up from 1.2 percentage points from 2015 to 2019. In recent years, contraction also has contributed most to the increase in prices of candy and cleaning products.

In the case of snacks, size reductions added 2.6 percentage points to inflation, roughly in line with what they contributed from 2015 to 2019. The government has not yet published an analysis on the contribution of reductions to inflation general from 2019 to 2023.

The contraction itself is reflected in official inflation data, but there is another hidden force that represents a cost to consumers and does not appear in the statistics. Sometimes companies use cheaper materials to save costs, a practice some call scrimping. For the government it is much more difficult to measure.

If a roll of paper towels costs the same, but the number of sheets is less (reduflation), the increase in the unit price is added to the official inflation. If the paper towels are the same size, but suddenly they are made of worse material (scrimping), the government does not record it as inflation.

In fact, according to government statistics, food and household products do not directly adjust to quality changes other than size and weight. This way, if the brand of microwaveable food you buy starts using vegetable oil instead of olive oil, or if the resealable container comes without its closure, it won’t be noticeable.

Companies choose to charge for their products instead of charging more for a simple reason: consumers tend to pay more attention to prices than sizes.

When numbers go down, “people may notice, but often they don’t,” says John Gourville, a professor at Harvard Business School. “There is no impact of seeing it on the label.”

A famous example is Dannon, which used to sell yogurt in larger containers than its competitor Yoplait: 226 grams versus 170 grams (eight ounces versus six). Consumers were convinced that Dannon’s yogurt was more expensive and didn’t realize that it was simply bigger. In the end, the company changed and reduced the size of its packaging.

“Dannon’s yogurt sales, which declined immediately after the downsizing, have since recovered,” the Times reported in 2003. “And Dannon now pockets a bigger profit on every cup of yogurt it sells.”

Not all size changes are the same. Some can be surreptitious, like increasing the size of a slit in the base of a jar or cutting the corners of a bar of soap. Consumers find it especially difficult to recognize size changes when they occur in three dimensions, says Nailya Ordabayeva, an associate professor at Dartmouth’s Tuck School of Business who has studied consumer responses.

“The brain is programmed to perform simpler heuristics,” he explains.

Additionally, he noted, consumers may be willing to accept smaller quantities or even prefer them in some cases. For example, junk food products have sometimes been shrunken to reduce the number of calories.

When companies simply look out for their profits—and not their consumers—there is a fear among pricing experts that persistent redflation will drive away buyers.

When raw material costs were rising and inflation was in the news, consumers most likely realized that companies had to pass some of those increases on to them. It’s even possible that they preferred smaller products over higher prices, according to several experts.

But now, headline inflation has calmed down: after peaking at 9.1 percent in July 2022, it had fallen to 3.1 percent by January. And consumers may be less willing to accept redflation now that companies face less severe cost pressures, especially because food companies’ profits have been—and in many cases remain—high.

They may simply feel cheated.

“I see consumers becoming more aware of redflation,” said Jun Yao, a marketing professor at Macquarie University in Australia who has studied the trend.

And as more chains and online retailers release unit costs, shoppers may be more attentive to size changes, Yao said, something that could counteract shrinking portions in the future.

This practice, he said, “can be counterproductive and damage the brand image.”

Jeanna Smialek writes about the Federal Reserve and the economy for the Times from Washington. More from Jeanna Smialek

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