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How shrinkflation is playing havoc with economists’ models

economist.com

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Re: How shrinkflation is playing havoc with economists’ models

#61

Post by GuB-42 »

dane-pgp wrote: post #6
forinti wrote: post #4

This is a process Brazilians know well. Chocolate bars used to have 200g. Some now have less than 100g. Toilet paper rolls used to have 50m; most now have 30m and some have only 10m. This sort of thing started happening in the 1980s, because the government had frozen prices (that always works well). It became such a problem that now the law says that the packaging must clearly point out if the quantity inside has cha…

I'd also like to see a law passed that requires each product to mention on its packaging if its ingredients (even just their relative proportions) have changed. This would apply to things like foods/drinks and also cleaning products. Of course companies would protest, claiming that their recipes are trade secrets, but we already require that products list their ingredients, and we protect trademarks for products, whi…

So you mean listing the change on already mandatory information.

Note that a lot can be told just looking at the label, but few people do it. For example quality meats tend to have more protein, quality diary products tend to to have more fat. High salt and sugar is usually a bad sign.

The order of ingredients is important too: greatest amount first. It means that if the thing they advertise in front of the package is way down the list, that's not good.

Re: How shrinkflation is playing havoc with economists’ models

#62

Post by refurb »

blihp wrote: post #47
winter_blue wrote: post #20

Earlier quoted context omitted.

Yea, this is something that's always impressed me about this US. In other countries, I have to pull up a calculator app on my phone, and calculate the price per kg for various packaging sizes, to figure out which one is the best deal. It's almost as though store labels in the US are designed with the discerning consumer in mind...

Don't be too impressed. We only have the price per unit listings, ingredient lists etc. as the result of bad business practices (and sometimes deaths) in the previous century. So it's not retailers or manufacturers responding to consumer demand... they're responding to government laws and regulation.

As most regulations are around the world - a response to some problem. It’s not unique to the US.

Do you have a source for the $/Oz being due to bad behavior? From what I’ve heard it was done purely to address consumer demand.

Re: How shrinkflation is playing havoc with economists’ models

#63

Post by joe_the_user »

dannyw wrote: post #53
cco wrote: post #34

Next time someone tells you, "Well even the poorest of us today eats better than a king in the middle ages" think about this quality "inflation". What is the current cost today of putting high quality, wild meat on the table along with seasonally ripe and fresh fruit? What about high quality beer with no use of malt substitutes? There are a number of measures, availability being one, where our modern food production…

It will cost you a little bit more in time and money, but go to your local (legitimate) farmers market and you’ll have quality meat, fresh veggies and fruit, and your local microbrewery will serve a cold one with no malt substitutes for a tiny bit more. Shopping local is so underrated.

Farmer's markets can be a good deal for what they sell but a lot brewpub is never to going to come close to the price of Budweiser or even more supermarket label beer. "A tiny bit more" here is $5 or $1.

And fast food is a much cheaper deal than if you cook veggies and organic burgers yourself - because quality does cost money.

Re: How shrinkflation is playing havoc with economists’ models

#65

Post by hirsin »

refurb wrote: post #62
blihp wrote: post #47

Earlier quoted context omitted.

Don't be too impressed. We only have the price per unit listings, ingredient lists etc. as the result of bad business practices (and sometimes deaths) in the previous century. So it's not retailers or manufacturers responding to consumer demand... they're responding to government laws and regulation.

As most regulations are around the world - a response to some problem. It’s not unique to the US. Do you have a source for the $/Oz being due to bad behavior? From what I’ve heard it was done purely to address consumer demand.

It's rarely purely price/oz. Often it's mixed units - eg for granola bars or similar you'll see four different items listed at -

Price/oz

Price/lb

Price/bar

Price/unit (which might be bar or package of two bars)

So you get tk calculate the difference in your head.

Re: How shrinkflation is playing havoc with economists’ models

#66

Post by hnarn »

In Sweden, "jämförelsepris" (comparison price) is mandatory for many goods. This means stores have to, in addition to price, display "price per gram" or whatever unit makes sense.

This way, you can quickly compare different groceries despite differing packages, and shrinking the item for the same price would be visible when looking at the comparison price.

Re: How shrinkflation is playing havoc with economists’ models

#67

Post by virgilp »

hnarn wrote: post #66

In Sweden, "jämförelsepris" (comparison price) is mandatory for many goods. This means stores have to, in addition to price, display "price per gram" or whatever unit makes sense. This way, you can quickly compare different groceries despite differing packages, and shrinking the item for the same price would be visible when looking at the comparison price.

This is an EU rule, no? Because it's not just Sweden.

Still, tbh, it still works on some items. Eg here most producer gradually shrinked yoghurt from 175 to 140g - pisses me off, but I must assume it works.

Re: How shrinkflation is playing havoc with economists’ models

#68

Post by nabla9 »

acd wrote: post #64

So you measure inflation price per gram model fixed. Current inflation models are also flawed in other ways as it changes goods exchange. Also if a measured market good is better price is adjusted. Example larger tv size.

The shrinkflation problem in bulk retail CPI calculation comes from the way the the data is collected. They typically use GTIN numbers and those don't change when the quantity changes. You need to do additional work to correct for that.

Quality adjustment in CPI calculation is routinely done for many products using hedonic modeling. It's important in all rapidly advancing product categories like like TV's as you mention. For a product like a smartphone price difference between the replacement item and its predecessor is almost never pure price change. For example screen resolution change in smartphones induces quality adjustment to the price change.

Re: How shrinkflation is playing havoc with economists’ models

#69

Post by eecc »

Haven’t read the article beyond the free teaser, but I wonder if an alternative explanation was that in previous decades competition strategies were strongly about adding to the amount of product: “10% more, for the same price!”

Now that the market consolidated and the losers have been driven out or bought out, the winners are quietly taking it back

Re: How shrinkflation is playing havoc with economists’ models

#70

Post by lrem »

hnarn wrote: post #66

In Sweden, "jämförelsepris" (comparison price) is mandatory for many goods. This means stores have to, in addition to price, display "price per gram" or whatever unit makes sense. This way, you can quickly compare different groceries despite differing packages, and shrinking the item for the same price would be visible when looking at the comparison price.

Same EU rule is circumvented by some shops by having the comparison prices in mismatched dimensions (volume Vs weight Vs unit).
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