Unit Prices: How to Spot and Beat Shrinkflation Tactics in Stores

San Rafael, California – Manufacturers are implementing new strategies to cope with rising production costs by using “shrinkflation” techniques. This tactic involves reducing product sizes while keeping prices the same, ultimately impacting consumers. The practice of altering package sizes, known as “price pack architecture,” has become increasingly popular in recent years.

A recent episode of “Planet Money” delved into the phenomenon of package sizes and how companies manipulate them to increase profits. The concept of “shrinkflation” has gained attention, with companies reducing the amount of product in packages without adjusting the prices, essentially leading to inflation in a literal sense.

While some forms of price pack architecture can benefit consumers by offering more options, such as smaller product sizes, there are also negative implications. Consumers may unknowingly pay more for less product due to deceptive packaging practices. This raises concerns about the transparency and fairness of pricing strategies used by manufacturers.

To combat the effects of shrinkflation and other packaging gimmicks, consumers can take proactive measures. By paying attention to unit prices and comparing the cost per ounce or unit across different product sizes, shoppers can make more informed purchasing decisions. Some states have implemented laws requiring stores to display unit prices to help consumers determine the best value.

New Jersey, for example, mandates that stores provide accurate unit pricing information to prevent deceptive pricing practices. Recently, regulators in the state fined a major retailer over inaccuracies in displayed unit prices, emphasizing the importance of transparency in pricing for consumers.

Despite efforts to regulate unit pricing, many stores across the country do not provide this information, leaving consumers to calculate unit prices themselves. While it may require more effort, calculating unit prices using a calculator or smartphone can help shoppers make cost-effective choices and avoid falling victim to deceptive packaging strategies.

Consumer advocacy groups advocate for increased transparency in pricing practices and support policies that encourage stores to display unit prices. By engaging with elected representatives and advocating for consumer-friendly policies, consumers can work towards a more transparent and fair retail environment.