What is “Shrinkflation” and The Best Ways to Deal With It?

Have you noticed? Prices going up on most items we use. Everything from gasoline to electronics seem to be more expensive. According to the Federal Reserve, inflation climbed in August at the quickest pace in 30 years.

There’s something else going on as well: some prices are remaining the same, but many packages are getting smaller.

Not only do we have to deal with inflation, which is priced going up, but now we have shrinkflation also. Shrinkflation is defined as the following:

Shrinkflation is a term made up of two separate words: shrink and inflation. The “shrink” in shrinkflation relates to the change in product size, while the “flation” part refers to inflation—the rise in the price level. British economist Pippa Malmgren has been credited for coining the term shrinkflation.

Read more about shrinkflation HERE.

I don’t know what’s worse: inflation or SHRINKFLATION. Either way, we get screwed. The more money they print, the purchasing power of the dollar decreases.

Here are a few visual examples of shrinkflation:

Here’s my personal experience with shrinkflation:

Why Shrinkflation?

Most companies understand their consumers don’t like to see prices of their favorite products increase. Shrinkflation is a way for them to retain their customers and not scare them away with price hikes. However, to maintain a profit, the size of the products will be reduced, in an effort to keep up with increased costs.

Studies on shrinkflation are scarce, but in 2017, The Office for National Statistics (ONS) found that as many as 2,529 products had shrunk in size over the past five years, but are being sold for the same price. We can expect these numbers to be much higher today.

Here are a few more examples of shrinkflation:

  • Charmin Ultra Strong toilet paper (Was 286 sheets; Now: 264 sheets)
  • Bounty 2-ply paper towels (Was: 138 half-sheets; Then: 128 half-sheets; Now: 110 half-sheets)
  • Hershey’s kisses, family size (Was: 18 oz.; Now: 16 oz.)
  • Nutella (Was: 14.1 oz.; Now: 12.3 oz.)
  • Skippy peanut butter (Was: 18 oz.; Now 16.3 oz.)
  • Kirkland Signature paper towels (Was: 96.2 sq. ft.; Now: 85 sq. ft.)
  • Dawn dish soap, small (Was: 8 oz.; Now: 7 oz.)
  • Ivory dish soap (Was: 30 oz.; Now: 24 oz.)
  • Haagen Dazs ice cream (Was: 16 oz.; Now: 14 oz.)
  • Puffs tissue (Was: 56 count; Now: 48 count)

Dealing With Inflation and Shrinkflation

Both inflation and shrinkflation can have a serious impact on families, with many having to cut back on various items to stay afloat. Here are the top ways to deal with shrinkflation and inflation:

Buy Items In Bulk

As prices begin to rise, buying items in bulk can help decrease costs over time. While prices are rising (or packages are getting smaller) you still have ample supply to hold you over. Water and toilet paper are two great items to buy in bulk:

Eat More Fresh Food

The good news is fresh foods may not shrink in size, but the bad news is they could go up in price. With that said, you may still get more bang for your buck with fresh foods.

Try Store Brand Items

In many instances, store brand items are very similar to name brand items in every way except price. Store brand items could be up to 60% cheaper, especially if on sale.

Call To Action

At the end of the day, there’s not much we can do to stop inflation or shrinkflation. The average person has to stretch their budgets to compensate for increased prices. This is one way the middle class gets “squeezed.” Fortunately, there is something else a person can try: create additional income streams.

Multiple streams of income are the key during periods of inflation and shrinkflation.

The average person has one job, and that one paycheck is supposed to pay for all your living expenses. This can be a challenge when prices are steadily rising. Instead of relying on that one check, creating multiple streams of income is critical. This way, a person is better equipped to withstand inflation and shrinkflation.

The average millionaire has 7 streams of income. This is not to be mistaken for 7 jobs. Many of these income streams are passive income, meaning they don’t have to actively be working to make money.

Popular examples of multiple streams of income include the following:

  • Rental property
  • Book royalties
  • Monetized websites
  • Vending machines
  • Franchises
  • Car wash
  • Dividends (stocks and mutual funds)
  • Bond interest
  • Laundromat
  • Small businesses
  • etc.

Multiple streams of income and passive income are excellent ways to deal with inflation and shrinkflation.

Discover the various ways to generate multiple streams of income in my online course Tired of the 9-5? How to Retire Early With Passive Income. Available on Udemy.

Leave a Reply