It’s not just you. It seems all types of products are getting smaller nowadays, from toilet paper and coffee to a pack of razors. This is commonly referred to “shrinkflation,” and lawmakers aren’t pleased about it.
In a letter sent this week, Sen. Elizabeth Warren (D-Massachusetts) and Rep. Madeleine Dean (D-Pennsylvania) called out the CEOs of Coca-Cola, General Mills, and PepsiCo for decreasing the sizes of their products but keeping the prices the same.
Why is everyone talking about shrinkflation? Shrinkflation has been a hot topic in recent months. President Joe Biden talked about it in the lead-up to the Super Bowl, calling it a “rip-off” and saying that companies were “playing the American public for suckers.” Even the Cookie Monster complained about shrinkflation.
“Me hate shrinkflation! Me cookies are getting smaller,” the Cookie Monster said in a post on X.
The reason you’re seeing shrinkflation everywhere is likely because of the because of inflation, which has been a hot topic in the presidential election. As reported by CNBC, consumers have largely blamed Biden for inflation, while the president has blamed corporate price-gouging.
There are many examples of shrinkflation. Some sites, like Mouse Print, have rounded up examples found in grocery stores. Brawny toilet paper, for example, reduced the number of sheets in its 8-roll pack from 120 to 100 and also decreased the width of the roll, according to Mouse Print.
The letter. In their letter, Warren and Dean accused Coca-Cola, General Mills, and PepsiCo, some of the biggest food and beverage companies in the U.S., of trying to squeeze more profit out of consumers through shrinkflation and dodging taxes.
“Over the past three years, Coca-Cola executives have made comments on corporate earnings calls expressing their intent to 'stretch out the pricing ladder,’ and ‘leverag[e]...greater pack diversity,’” the lawmakers wrote. “These comments may attempt to signal an interest in genuine innovation… but the reality makes clear that what Coca-Cola’s executives actually meant was shrinkflation: selling less soda for the same price.”
PepsiCo and General Mills didn’t escape notice. Warren and Dean cited the company’s replacement of a 32 oz Gatorade bottle with a 28 oz bottle for the same price, a 14% price increase. According to the letter, PepsiCo has justified this decrease by stating it’s an answer to consumer-driven “portion control” preferences.
Does shrinkflation make a big difference? Some experts say that while consumers may notice shrinkflation at the grocery store, it doesn’t affect them as much as they might think. The Bureau of Labor Statistics analyzed shrinkflation in recent years in 2023 article and had the following to say:
“However, the impact of product downsizing at the all commodity and services level is minimal, with an average annual effect of 0.01 percent per year, so while consumers may notice shrinkflation at the grocery store, it has a very small impact the overall inflation picture they face,” Kari McNair, an economist at the Office of Prices and Living Conditions, wrote.
Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, told CNBC that shrinkflation isn’t as common as politicians say it is and isn’t that influential in consumers’ lives.
“Ultimately, consumers’ lives are harder because of inflation,” de Rugy said.
The ask. Warren and Dean are asking the CEOs of Coca-Cola, General Mills, and PepsiCo for specific information regarding prices and company operations. We reached out to the three companies for comment on the letter on Tuesday but didn't immediately hear back.
Specifically, they’re asking for: the price the companies charged per ounce of cereal and soda beginning in 2018; how much more they would have paid in taxes if the 2017 Tax Cuts and Job Act hadn’t been in effect; and whether their executives received bonuses or other initiatives during periods of high inflation.
“People have noticed that their box of Cheerios and bag of Doritos are smaller, but prices are higher—and at the same time these giant corporations are paying lower tax rates than the average American,” Warren told NBC News in a statement. “We can’t let them get away with this price gouging and tax dodging. It’s just plain wrong, and we’re fighting back.”
Images | Hernán Piñera | Mary Crandall
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