This article says the French government is going to force companies to tell consumers when they shrink a package without a corresponding reduction in price. Ideas like this warm the soul. But of course, significant reductions have probably already happened. In Canada, the shelves would be awash in labels - especially processed snack foods.
A step in the right direction? Or just noise?
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The first one.
“New More Convenient Size!”
I’ll argue that it might be a step in the right direction, but very quickly it will devolve to just noise.
Let’s say for the moment we have a product that comes in exactly 500gram packages. So the manufacturer cuts the package size to 450grams & the store puts up a sign: “new smaller package”. How long do they leave the sign up? Does it have to say what the old size was? How about showing the percentage size reduction. If they later change the price (up or down) how does that affect the signs?
Now let’s say some months or years later the package is shrunk again, now to 400grams. What now? “New smaller package” sign? Does it reference the old size of 450, or the “original” size of 500?
Lather rinse repeat a couple times and every product on every shelf will have a sign. Which means effectively none of them will. At which point the signs are noise, just like the California Prop 65 cancer warning signs at the door to every building in the state.
ISTM that most packaged consumer products are already sold in oddball sizes today because they’ve already been shrinkflated and in many cases for 50+ years. I was a tween when the price of ordinary coffee exploded due to [something]. First the 3lb = 48 oz cans shrank to IIRC 40 oz. Pretty quickly we had the legendary “12 oz pound of coffee”, but that happened in several steps over a couple years. All designed to hide the price increases.
Then the serious late 1960s / early 1970s inflation hit and the rest of the grocery store products followed coffee’s lead.
We already require package volume or weight on the label. Could get better in with things like ‘serving size’. If something like this is done here products will just be marked as “New Economy Size” or some such other nonsense. Perhaps using the same package for less product should be noted, but manufacturers won’t use the exact same package if that becomes a rule. This idea might fly in France but not here in the US.
Another aspect of shrinkflation in this article about movie theater drinks. This time the 24 oz. drinks are being served in containers that can only hold 22 oz. This is not the common claim of false advertising based on ambiguous language. I don’t know if a law suit will resolve this for the people already short changed on their drinks, but all 50 states have regulations requiring products sold by specific weight or volume to meet the advertised amount.
Let’s say that a snack food company has a large, 12 ounce package, suitable for a family, or a picnic, or for a single person to eat over the course of a couple of weeks. And then they introduce a small, one-ounce package, suitable for packing in a single lunchbox. I think we can all agree that that’s not shrinkflation, and the company shouldn’t have to disclose that, right? But then, where do we draw the line? Is it just that the new, smaller package is at the same price point as the old one? What if they released a 10.5 oz package that’s a few cents less than the 12 oz (but still a higher unit price)? What if they release a smaller package that’s actually more expensive than the larger one (this often happens with pop)? Does it matter whether they discontinue the original, larger package? What if the larger package still exists, but they cut the distribution of it way down?
Two months, according to the OP’s link.
Also unit pricing (price per ounce or per liter or whatever) is displayed.
What we don’t display, which is what this French requirement is about, is changes in size/price.
I can’t decide whether this is a good idea or not. My immediate reaction is “I’m glad somebody else is doing this, so that we can wait and see how it works out before trying it ourselves.”
We’re not good at ‘trying things out’ here in the US of A. Might help to watch another country give it a go.
Well, we’re even worse at adopting things that have been shown to actually work in more socialized economies.
There’s no rational reason why it needs to be called out specifically; caveat emptor, don’t be a dumbass, read the labels, etc… Everything anyone needs is already right there on the label and it’s not anyone else’s fault that they can’t be bothered to actually look and read and maybe do some fourth grade math.
Shrinkflation is totally a reaction on the part of retailers to these same people who can’t understand that in the face of rising costs, either prices need to go up, or package size needs to go down. Expecting a company to forego profits just for the sake of making them comfortable in their mental rut isn’t really a reasonable expectation.
Typically, actual shrinkflation is happening when the manufacturer downsizes the same SKU (with the same UPC); the exact same item (from a distribution/shelving perspective) is now smaller in size, and the old, bigger version of that SKU is no longer being made.
Sure, that’s what they usually do now, because there’s no reason not to. And there are probably some minor bureaucratic hassles with changing SKUs. But if you pass a law that you can’t change package size without changing SKU, then they’ll just change the SKU when they change the package size. Because customers might or might not notice the different package size, but they definitely won’t notice that the SKU is different.
Actually, there can be major hassles.
Keeping the same SKU means that the manufacturer likely doesn’t need to re-justify the item being carried by a retailer (who has already agreed to carry that item); a new SKU typically will require the manufacturer to revisit this with each retailer, and most retailers charge “slotting fees” to pick up a new SKU – and they will be unlikely to buy the argument that “this simply replaces that old SKU, and you should just swap it out.”
There is intense competition for shelf space, and a manufacturer who has a hard-won spot for an SKU will not easily or willingly give it up. Discontinue the SKU (even if you’re replacing it with a similar, smaller one), and you risk losing that spot on the shelf, or at least set yourself up for having to shell out new slotting fees.
My cite: 35 years of work in advertising and marketing, including for several major packaged-goods manufacturers.
Regardless of the language, as an attentive consumer you generally realize when the volume of that large box or package has decreased, and the price has not. I can tell when shrinkflation is a thing. And it isn’t because of a decision to introduce snack sized lunch fodder. There are complexities but it is hardly an insurmountable problem. The bigger question is whether the price increase is due to greed or other factors beyond the control of the industry.
Trust me when I tell you that most consumers are not that attentive.
I agree. It amazes me how price insensitive many are. But you are an attentive consumer, no?
It’s not looking and doing the math that’s the problem. It’s remembering what the old size and price were. Some things are easy, like the mentioned 12oz “pound” of coffee or 1.5 quart “half gallons” of ice cream. Others are much harder. Did that 27 ounce box of cereal used to be 30 ounces? Am I just now noticing because the box changed size, but for a long time they’ve only been filling the 30 ounce box to 27 ounces?
Yes, but stores game this, too. Just the other day I was comparing prices for bags of granola, and some were listed as $/ounce while others were $/pound. For example, one might have been 12 ounces for $6.99 = $0.58/oz, and the next is 15 ounces for $8.99 = $9.59/lb. Quick, which is cheaper by weight? Sure, the math is easy, but you still have to do it.
I’m sure if changing SKUs was useful to avoid some regulation that the companies involved would work out a frictionless way to update existing an existing SKU to a new one. (Of course, depending on the relative size of the players, one might view this as an opportunity to extract money from the other.)
Sure, but this sort of thing isn’t anything new. It’s been going on for decades, and people are acting like it’s some new and diabolical way that manufacturers are trying to cheat people. Which it’s not, because labeling laws expressly prevent actual cheating.
And I’m a bit skeptical that they’d be ok with the alternative and not bitch about that too. It would take the form of “A pound of coffee costs $8.20! That’s highway robbery!” It’s because people expect a can of coffee to cost some specific amount and when the price goes up, they get cranky about that too. So companies sell them a 10 oz can for $5, and people are more happy than if they try to sell them a 16 oz can for 8.20.
Am I the only one who doesn’t even look at the package price? I just look at the price per ounce to begin with, and buy the package that has the best price per ounce, and then I look at the size of the package and decide how many I ought to buy at once.