On Tuesday, Cookie Monster, the ravenous blue puppet who has a penchant for chocolate chip cookies, expressed his dismay at “shrinkflation,” which has been called “the worst corporate idea in years” by Forbes.
Shrinkflation, a portmanteau of the words shrink and inflation, is a decades-old strategy where items shrink in size or quantity — sometimes even quality — while their prices remain the same. The grocery shrink ray is just one of many responses during periods of shortages and inflation. Recently, shrinkflation took off during the pandemic, when significant supply chain disruptions and labor shortages forced companies to drive up food and transportation costs. Instead of alleviating those costs, companies kept them high to offset higher wholesale costs while downsizing their products.
The Bureau of Labor Statistics identified food and household commodities, including potato chips, paper towels, cereal, cleaning supplies, and candy, as some of the top product groups most affected by shrinkflation. Toilet paper and paper towels are reportedly 34.9% more expensive per unit than they were in January 2019, per a December report from Democratic Sen. Bob Casey, citing Labor Department data. Of that total cost increase, 10.3% is due to producers reducing the size of rolls and packages. A similar increase was observed for snacks like Oreos and Doritos, which are 26.4% more expensive since January 2019. Nearly ten percent of that price hike has been accomplished by giving consumers fewer chips and cookies for their money’s worth.
The report also noted that family-size packs of Double Stuf Oreos decreased 6% in size by weight, but maker Mondelez International is charging the same price. Consumers further claimed that Mondelez reduced the amount of filling in each Oreo — an accusation that the company denied and still remains unverifiable.
Ahead of the 2024 presidential election, inflation remains a top issue among voters, many of whom have blamed Biden for rising costs. Now that national inflation is set to fade in 2024, the president along with lawmakers are shifting their attention to growing shrinkflation. Last month, Biden slammed shrinkflation in anticipation of the Super Bowl, calling on companies to “put a stop to this” in a game day commercial.
“I've had enough of what they call shrinkflation,” he said. “It's a rip-off.”
"Some companies are trying to pull a fast one by shrinking the products little by little and hoping you won't notice…I'm calling on companies to put a stop to this,” Biden added.
On Thursday, Biden called out shrinkflation during his annual State of the Union address to Congress: “Too many corporations raise prices to pad the profits, charging more and more for less and less,” he said. The president also joked about the candy bar Snickers, saying they are now smaller in size but available for the same price.
“The snack companies think you won't notice if they change the size of the bag and put a hell of a lot fewer — same size bag — put fewer chips in it,” Biden added before boosting Casey's shrinkflation-centric bill.
Earlier this year, Casey penned a letter to the Government Accountability Office urging the oversight agency to examine the effects of corporate greed on consumers. “Corporate strategies to hide price increases and raise the unit cost of everyday items like food and household products are hurting families in Pennsylvania,” he wrote. “The American people should not have to tolerate corporate executives squeezing them for every last nickel and dime.” Casey cited his November greedflation report, which found that from July 2020 through July 2022, inflation rose by 14 percent while corporate profits rose by more than 74 percent.
Casey, who serves on four committees in the 118th Congress including the Committee on Finance, co-introduced a bill focused on shrinkflation late February alongside Sen. Elizabeth Warren, D-Mass. The Shrinkflation Prevention Act would allow the Federal Trade Commission and state attorneys general to crack down on corporations that reduce product size without a reduction in price. Section 5 of the Federal Trade Commission Act already prohibits “unfair or deceptive acts or practices in or affecting commerce.” If the bill is passed, then shrinkflation would also be qualified as unfair and deceptive.
“Corporations are trying to pull the wool over our eyes by shrinking their products without reducing their prices — anyone on a tight budget sees it every time they go to the grocery store,” Casey said. “Pennsylvania families are sick and tired of digging deeper into their wallets for their weekly grocery runs while corporate CEOs laugh all the way to the bank. I’m fighting to crack down on shrinkflation and hold corporations accountable for these deceptive practices.”
Groundwork Collaborative, a progressive economic policy research group, along with Public Citizen, a non-profit consumer rights advocacy group, have both endorsed Casey’s bill. The bill has seven Democratic co-sponsors including Sens. Tammy Baldwin of Wisconsin, Elizabeth Warren of Massachusetts, Jacky Rosen of Nevada, Cory Booker of New Jersey, Sheldon Whitehouse of Rhode Island, Sherrod Brown of Ohio and Patty Murray of Washington as well Sen. Bernie Sanders, I-Vt.
Many Republican opponents say the bill “would go too far by telling companies how to package their products,” according to USA Today. Mike Faulkender, who served as assistant secretary for economic policy at the Treasury Department under former President Donald Trump, asked if Democrats “[had] any idea how communist in nature that would be?”
At this time, consumers can combat shrinkflation by adopting smart shopping strategies. According to U.S. News & World Report, consumers should compare the unit prices of products, consider store brand items, enroll in a membership-based store, limit their purchases of processed snacks and focus on healthy bargain foods.
