Posted on 07/08/2021 11:15:05 AM PDT by blam
The continued decline in Treasury yields has prompted many short-sighted arm-chair analysts to declare that the Fed was right about inflationary pressures being “transitory”. Of course, as Treasury Secretary Janet Yellen herself admitted, a little inflation is necessary for the economy to function long term – because without “controlled inflation,” how else will policymakers inflate away the enormous debts of the US and other governments.
As policymakers prepare to explain to the investing public why inflation is a “good thing”, a report published this week by left-leaning NPR highlighted a phenomenon that is manifesting in grocery stores and other retailers across the US: economists including Pippa Malmgren call it “shrinkflation”. It happens when companies reduce the size or quantity of their products while charging the same price, or even more money.
As NPR points out, the preponderance of “shrinkflation” creates a problem for academics and purveyors of classical economic theory. “If consumers were the rational creatures depicted in classic economic theory, they would notice shrinkflation. They would keep their eyes on the price per Cocoa Puff and not fall for gimmicks in how companies package those Cocoa Puffs.”
However, research by behavioral economists has found that consumers are “much more gullible than classic theory predicts. They are more sensitive to changes in price than to changes in quantity.” It’s one of many well-documented ways that human reasoning differs from strict rationality (for a more comprehensive review of the limitations of human reasoning in the loosely defined world of behavioral economics, read Daniel Kahneman’s “Thinking Fast and Slow”).
Just a few months ago, we described shrinkflation as “the oldest trick in the retailer’s book” with an explanation of how Costco was masking a 14% price hike by instead reducing the sheet count in its rolls of paper towels and toilet paper.
NPR’s report started with the story of Edgar Dworsky, who monitors grocery store shelves for signs of “shrinkflation”.
A couple of weeks ago, Edgar Dworsky walked into a Stop & Shop grocery store in Somerville, Mass., like a detective entering a murder scene.
He stepped into the cereal aisle, where he hoped to find the smoking gun. He scanned the shelves. Oh no, he thought. He was too late. The store had already replaced old General Mills cereal boxes — such as Cheerios and Cocoa Puffs — with newer ones. It was as though the suspect’s fingerprints had been wiped clean.
Then Dworsky headed toward the back of the store. Sure enough, old boxes of Cocoa Puffs and Apple Cinnamon Cheerios were stacked at the end of one of the aisles. He grabbed an old box of Cocoa Puffs and put it side by side with the new one. Aha! The tip he had received was right on the money. General Mills had downsized the contents of its “family size” boxes from 19.3 ounces to 18.1 ounces.
Dworsky went to the checkout aisle, and both boxes — gasp! — were the same price. It was an open-and-shut case: General Mills is yet another perpetrator of “shrinkflation.”
It’s also being used for paper products, candy bars and other packaged goods.
Back in the day, Dworsky says, he remembers buying bigger candy bars and bigger rolls of toilet paper. The original Charmin roll of toilet paper, he says, had 650 sheets. Now you have to pay extra for “Mega Rolls” and “Super Mega Rolls” — and even those have many fewer sheets than the original. To add insult to injury, Charmin recently shrank the size of their toilet sheets. Talk about a crappy deal.
Shrinkflation, or downsizing, is probably as old as mass consumerism. Over the years, Dworsky has documented the downsizing of everything from Doritos to baby shampoo to ranch dressing. “The downsizing tends to happen when manufacturers face some type of pricing pressure,” he says. For example, if the price of gasoline or grain goes up.
The whole thing brings to mind a scene from the 2000s comedy classic “Zoolander”.
I find that’s still true but you have to buy the extra large giga size can of tuna..
Cocoa has many benefits. A pizza or potatoes made with canola oil is not a good option.
Now a pound of coffee is 12 ounces or 75% of a pound. This is a price increase of 33%.
My rib eye is about $1.50 per pound as are all meat cuts and hamburger. But I raise my own cattle.
Get out of the city.
Hard to ‘shrink’ a pound of carrots or a head of lettuce. The closer you eat to the ground, the better off you are.
Learn to cook and bake from scratch. It’s NOT hard, just a little more time consuming.
That said, I will buy and brew the CHEAPEST store brand coffee I can find, but I will pay whatever they ask of me for my favorite flavored coffee creamers. ;)
Yes, I know I can make my own, but they just don’t taste the same. I must be addicted to the secret blend of chemicals used, LOL!
(I am working on weaning myself off of them. When the bottle is 1/2 empty, I then fill it up with Half & Half. So far, my Inner Coffee Fiend seems to be fooled.)
Sometimes. I still can’t make eggs as cheap as store bought, all things considered. My chickens are a lot tougher than store bought. Open range is probably why.
What you get with “eating close to the ground” is reliability. I really don’t have to worry about empty shelves. That has a lot of value.
My grandparents had jobs similar to those of my generation. Yet, they had HUGE houses on HUGE lots, ten kids, two maids, a yard man, and every stick of furniture they had was so well built, it is still being used by their great, great grandchildren. And, when they died, they had savings enough to pay for the HUGE taxes.
Inflation my a$$. Our wealth and income have been stolen from us, and given to the stupid, lazy underclass.
I'm very rural and surrounded by beef cattle farms but our property isn't big enough so we got meat goats last year and will be putting some in the freezer next year. Got a Boer buck on top of two Kiko does. Could have put a buckling in the freezer this year but I was curious to see how fast he'd grow out. He's as big as his momma now and got a big ole set hanging. I might put him on top of the doe who's not his momma. Boers tend to be high maintenance so I want to see how high a percentage of Kiko I can go while still putting on quick weight. Kiko are the lowest maintenance meat goat breed. Also wanting to get a small breed of pig like Kunekune.
“Walking into the lowes foods this morning and it said Tribe Humus was on sale.”
Humus. A vegetarian delight enjoyed by people who can no longer afford meat. (or perhaps are just enamored by the moslum lifestyle)
Most ice cream is now 1.5 quarts instead of a half gallon. Package looks the same. The couple that are still a 1/2 gallon aren’t hard to find - it’s all over their package. LOL
This inflation is good for you. You vill like it!
I’ve seen this “shrinkflation” at the grocery store. This allows the corrupt biden administration to claim that prices are not rising.
Many conglomerates have "store brands". Such is the case with Kroger.
Them burgers get any smaller we’ll have to start snorting it like cocaine.
INGREDIENTS: GENERAL MILLS COCOA PUFFS (Sugar, Whole Grains (Corn, Oats, and Rice) and Corn Flour, Modified Corn Starch, Cocoa, Canola and/or Rice Bran Oil, Corn Syrup, Cocoa Processed with Alkali, Salt, Calcium Carbonate, Caramel and Beet Juice Concentrate Color, Tricalcium Phosphate, Trisodium Phosphate, Zinc and Iron, Artificial Flavor, Vitamin C, Niacinamide, Vitamin B6, Vitamin B2, Vitamin B1, Folic Acid, Vitamin B12, Wheat Starch, Vitamin E and BHT to preserve freshness.)
Opinions vary on what is healthier. I think the amount of canola used and how much it was heated can make it more harmful.
It was happening well before now on various products.
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