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Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

theguardian.com

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Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#201

Post by MostlyStable »

Brybry wrote: post #184
vasco wrote: post #131

Earlier quoted context omitted.

Temporarily and in a localized way, yes. For example, if there's a natural disaster, and the people in power aren't dumb, they'll let prices float instead of putting caps in place, and everyone will be incentivised to rent big trucks full of water bottles and sell it for 20-50x the normal price. For the affected people it makes sense because now they can drink water, and if the prices were controlled nobody would mak…

> if there's a natural disaster, and the people in power aren't dumb, they'll let prices float instead of putting caps in place I think most states that experience natural disasters have price gouging laws that make it illegal to raise prices, during a declared emergency, beyond the level required by increased costs. Or at least I know Louisiana[1] and California[2] do. And here in Louisiana we've had a lot of disast…

"Works" in the sense that it keeps prices from going to high. Fails in that it prevents people from preparing adequately for forseeable disasters and bringing in more of the things people need in a disaster.

In my opinion, disasters that have some level of predictability (hurricanes are the best example) shouldn't have price gouging laws. If you were allowed to raise your prices arbitrarily high, and you knew a hurricane was coming, what would you do? Bring in as many of the goods as you thought you could get higher prices for as you could. This results in an equilibrium where lots more water, food, batteries, etc. gets brought in, prices rise only somewhat, and no law is necessary.

Now, I agree that for disasters that aren't forseeable (like earthquakes), you lose the signalling value, so I'm more amenable to it.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#202

Post by myrmidon »

malfist wrote: post #153
WalterBright wrote: post #126

Earlier quoted context omitted.

> Corporate profits are high. Inflation increases profits, too (but not in real dollars). > This is one of the reasons why. The reason why is inflation.

> Inflation increases profits, too (but not in real dollars). [Citation needed] I find it hard to believe that corporate profits rise exactly proportional or less than the inflation rate.

Just compare corporate profits before and after Covid, see e.g.

https://finance.yahoo.com/quote/CA.PA/financials?p=CA.PA

Not much of a difference. Certainly nothing that looks outright malicious.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#203

Post by deelowe »

m000 wrote: post #186
josu wrote: post #171

Earlier quoted context omitted.

Do not buy into that narrative. This inflationary process has been mostly driven by monetary policy. Margin increases are the result of businesses trying to navigate an inflationary period. These margin increases are not resulting in increased profits across the board (there are some notable exceptions). For example, Carrefour's profits in 2022 were about the same as in 2019. [1] From the article you linked: "Profits…

> Do not buy into that narrative. ... Carrefour's profits in 2022 were about the same as in 2019. Isn't this exactly why we should buy into this narrative? The manufacturers increased their margins, so Carrefour sells more expensive, but in the end gets the same total profit.

The parent is saying that these "increase in margins" are companies trying to get ahead of inflation. The media narrative has been to blame the corporations, despite the real issue being the economy. There are elections to worry about, so we can't have that.

Smart businesses don't wait until they start losing money to make adjustments. They plan ahead. These "margin increases" are literally increases due to inflation which will companies expect to take hold over the next 1-2 years. There could be a variety of factors for this. One such example is corporate bonds rolling over to new interest rates which are expected to start happening en masse very soon.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#204

Post by WalterBright »

lesuorac wrote: post #179
WalterBright wrote: post #126

Earlier quoted context omitted.

> Corporate profits are high. Inflation increases profits, too (but not in real dollars). > This is one of the reasons why. The reason why is inflation.

Inflation is a disease not a virus. Inflation does nothing on its own; it does not have agency. It's just a description of a symptom (increase in price). Whether that set of symptoms (Disease) is caused by price gauging or labor price increases or resource prioritization is not known just from inflation. Although if you see that profits are way up then you know its not due to labor price increases as that company's r…

If inflation is 10% and profits go up 10%, most likely that's inflation's effect.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#205

Post by Manuel_D »

justinclift wrote: post #196
josu wrote: post #171

Earlier quoted context omitted.

Do not buy into that narrative. This inflationary process has been mostly driven by monetary policy. Margin increases are the result of businesses trying to navigate an inflationary period. These margin increases are not resulting in increased profits across the board (there are some notable exceptions). For example, Carrefour's profits in 2022 were about the same as in 2019. [1] From the article you linked: "Profits…

Here in Australia we seem to be having high inflation of food, which the main supermarkets (a duopoly) are blaming on the cost of goods. Meanwhile, they've both reported their highest ever company profits. :( So, clearly they're full of shit about the cost of goods being the cause rather than their own price gouging.

Record profits in a period of inflation is not surprising.

If the value of the Australian dollar halves, then a company doubling it's raw profit figures is really just staying maintaining the same profits in real value.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#206

Post by hedora »

what-no-tests wrote: post #119

Wow if only the State could mandate how much something should cost, and then perhaps the Politburo could meet once every five years to discuss how much of everything should be manufactured, we could regulate our way out of this mess. /s

You are describing the Chicago Board of Trade. They set depressed prices for farm goods so the middlemen can take a bigger markup without causing civil unrest.

This is one reason the farm subsidy still exists.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#207

Post by [deleted] »

eddtests wrote: post #123
NickM wrote: post #106

Earlier quoted context omitted.

Supply constraints typically lead to higher prices and higher margins. The fact that the margins have gone up does not somehow imply that the higher prices are something other than inflation.

Why does it cause such higher margins?

[deleted]

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#208

Post by _Nat_ »

> For example, Carrefour said a bottle of sugar-free peach-flavoured Lipton iced tea, produced by PepsiCo, shrank to 1.25 litres (0.33 gallon) from 1.5 litres, resulting in a 40% effective increase in the price a litre.

That's only a 20% -- rather than 40% -- effective increase in the price-per-volume, right?

[Calculation on WolframAlpha](https://www.wolframalpha.com/input?i=%28+%281%2F1.25%29+-+%2...

Trying to figure out what went on there. For example, maybe they meant that the price-per-volume did go up 40%, and they meant that the reduced-size contributed to (rather than "resulted in") that 40% increase? Or, maybe ChatGPT did the math?

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#209

Post by hedora »

matthewfelgate wrote: post #87

Is there an app where you can scan a barcode and it will suggest cheaper alternatives?

The Amazon app apparently supports that.

I’ve never tried to use that feature. I looked for the feature because you asked.

I’d much rather have an AR app that scans a shelf, grays out anything that doesn’t meet my dietary preferences, and highlights the 3 cheapest options.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#210

Post by ericpauley »

programmertote wrote: post #80

The worse combo is shrinkflation with significantly increased price. I used to buy Arm and Hammer detergent (250 FL OZ) from Costco for ~$11 about a year ago. Last week, I went to Costco and saw that they have reduced the size of the container (in a very subtle way so it is hard to notice) with 200 FL OZ and charges $14.89. That is like double rip-off. My salary did not increase 35% between this and last year. For Ch…

FYI on the detergent point: the new bottle may be more concentrated. I saw this too but when I compared the two bottles closely the dose size was also reduced (and I suppose the detergent more concentred, though hard to verify).
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