What is “shrinkflation” and how can we spot it?

Have you ever been to the grocery store and felt like that box of cereal got a little lighter? Well, you aren’t going crazy–shrinkflation is when companies reduce the volume of a product instead of increasing its price. Hitendra Chaturvedi of ASU’s W.P. Carey School of Business joined us to explain.

“Shrinkflation is when the things in boxes at the grocery store, you start to feel that the sizes are decreasing but you seem to be paying either the same price or even a bit more,” Chaturvedi said. “You can’t check it because the box that you bought a month ago is already in the garbage bin.”

Chaturvedi likened the process to the scientific Law of Thermodynamics. In the same way that energy can be neither created nor destroyed, the consumer has to answer somehow to an increase in price of raw goods or materials. He also explained that, in many ways, shrinkflation is just another example of plain-old inflation.

For example, if the net weight of a box of cereal decreases from 16 ounces to 14 ounces, then it has decreased in size by 15%. If the price of the cereal box stays the same on the shelf and doesn’t change despite the decrease, then it is inflation under another name.

Sponsor message:

In this segment:

Hitendra Chaturvedi, Professor, Supply Chain Management, W.P Carey School of Business

Sponsor message:

Vienna Blood Season 2

Vienna Blood season 2 Promo

Vienna Blood, the cerebral crime drama set in glittering 1900s Vienna, returns for a second season featuring three new two-part mysteries.

With Infinite Hope: MLK and the Civil Rights Movement

With Infinite Hope

The program follows King's career from his hiring at Dexter Avenue Baptist Church and leadership of the Montgomery Bus Boycott, through his death on April 4th, 1968 in Memphis.

Nova “Alaskan Dinosaurs”

NOVA Dinosaurs

A team of intrepid paleontologists discovers that dinosaurs thrived in the unlikeliest of places—the cold and dark of winter in the Arctic Circle.