Tired of paying more for less at the grocery store? A couple of U.S. lawmakers are, too – and they’re demanding answers from some of the country’s largest food manufacturers.
Democratic U.S. Senator Elizabeth Warren of Massachusetts, who has already publicly called out everything from grocery industry consolidation, to price gouging, to digital price tags, is now taking aim at shrinkflation. This time, she and Democratic Representative Madeleine Dean of Pennsylvania have sent letters to the CEOs of Coca-Cola, PepsiCo and General Mills, accusing them of “profiteering off consumers” by shrinking package sizes and charging the same price, and subsequently “dodging taxes on the profits they made from that price gouging.”
“All three of these companies have shrunk the size of their packaging to squeeze profits out of their customers, and then paid a very slim federal income tax on their billions of dollars in profits,” the two lawmakers explained in announcing their effort.
Their letters call out specific examples of shrinking package sizes, which they say amount to hidden price hikes that “gouge consumers.” Consumer advocate and Consumer World founder Edgar Dworsky closely tracks shrinkflation, and several examples that he first spotted are cited in the lawmakers’ letters. General Mills, for example, shrunk their “Family Size” cereal boxes by about an ounce a few years ago, while charging the same price. “That is a loss of one bowl of cereal in each box — the equivalent of a 27 cent price increase,” Dworsky wrote at the time. And PepsiCo shrunk its 32-ounce Gatorade bottle to 28 ounces for the same price.
“Shrinking the size of a product in order to gouge consumers on the price per ounce is not innovation, it is exploitation,” the lawmakers’ letters read. “Unfortunately, this price gouging is a widespread problem, with corporate profits driving over half of inflation.”
Representatives from Coca-Cola, PepsiCo and General Mills did not respond to requests for comment about the letters and the allegations. But PepsiCo, for one, may already be backing off, after one retail analyst said the company “probably pushed it too far” in shrinking package sizes to boost profits. On Tuesday, PepsiCo CEO Ramon Laguarta told investors that “bonus packs” of Tostitos, Ruffles and Doritos will now contain 20% more chips for the same price, and variety packs will now contain two or three extra bags.
That’s but a small victory, though, in a sea of shrinking package sizes. “While shrinkflation is not new,” the economic advocacy group Groundwork Collaborative wrote in a report earlier this year, “it is arguably the most deceptive pricing practice companies use and has come under renewed scrutiny as Americans face grocery prices 25% higher than prior to the pandemic.” The group said shrinkflation accounted for up to 10% of inflation in certain categories.
A more recent report from LendingTree released just a couple of weeks ago analyzed nearly 100 grocery products and found that a third of them have shrunk. “Household paper products — toilet paper and paper towels — saw the highest rate of change via fewer sheets per roll,” the report found. An accompanying survey found that 71% of shoppers have noticed at least one incident of shrinkflation over the past year, 82% say they feel deceived by it, 66% say they’ve stopped buying certain products because of it, and when given the choice, more shoppers would prefer that companies simply raise prices rather than reduce sizes.
“People are already frustrated that things cost more,” LendingTree chief credit analyst Matt Schulz said in a statement. “Shrinkflation just adds insult to injury. It all adds up to a lot of Americans feeling squeezed every month to afford the basic things they can’t do without.”
As for the lawmakers’ letters, they come seven months after a group of Senators – including Sen. Warren – introduced proposed legislation called the “Shrinkflation Prevention Act of 2024.” The measure would direct the Federal Trade Commission to “establish shrinkflation as an unfair or deceptive act or practice,” allowing regulators to instigate legal action against any company engaging in the practice.
With inflation a hot-button campaign issue, one might perceive this battle against shrinkflation as either sincere consumer advocacy, or election year politicking, depending on your point of view. Either way, these two lawmakers – along with many of Coca-Cola, PepsiCo and General Mills’ customers – await the companies’ response. And if getting 20% more chips for the same price ends up encouraging shoppers to buy more – that may be a size-change tactic that everyone can get behind.
Image sources: Mouse Print
Maybe if our disgusting, corrupt, incompetent federal government would stop spending trillions of dollars we don’t even have, which has been the primary driver of 20-25% food inflation over the past 3.5 years, we wouldn’t have to worry about shrinkflation.