The changes are subtle and may elude less discerning buyers. But retail industry experts say we could see more consumer products begin to shrink in size or quantity, or both, due to rising costs.
Companies can raise prices, and many do. Others are charging customers the same price while offering less.
Product downsizing, also known as “shrinkage,” is happening with toilet paper, said Edgar Dworsky, a former Massachusetts assistant attorney general who is a consumer advocate and publisher of the website ConsumerWorld.org .
“Downsizing occurs in times of high inflation because companies that make everyday products also pay more for raw materials, production and delivery costs,” said Dworsky, who is tracking how the period of ‘high inflation affects consumer products for three decades.
Dworsky said product downsizing is becoming more and more common, and he recently spotted several cases of brands discreetly downsizing their products.
“That equates to losing the equivalent of about a roll and a half in the new 18-pack,” he said.
Dworsky noted that large-sized toilet paper packages are now more commonly stocked in stores. “It’s almost impossible to find a four-pack,” he said.
While he doesn’t track product prices, Dworsky said when product downsizing occurs, consumers end up paying more for less product or the same price but for less.
“That’s not to say that all of Procter & Gamble’s toilet paper products will see a change. But I’m guessing that changes will come to more products,” he said, adding that he will have a report coming soon on other toilet paper brands.
In its most recent earnings call, Procter & Gamble executives acknowledged that the company was facing a “challenging cost environment” due to the continued effects of the pandemic on supply chains, a tight labor market and because “the availability of materials continues to stretch”.
In an email to CNNBusiness, Procter & Gamble noted several reasons for its product size variations and that store prices are determined only by retailers.
“There is a cost element to innovation: adjusting the number per pack or the pack size is a way to reinvest in that innovation while maintaining a competitive price,” the company said.
P&G said it also tailors product sizes to different retailers. So the rolls may have shrunk in some stores, but not in others.
“At the same retailer, the assortment you find in a suburban location may differ from what’s in a smaller urban retail location and what’s on a retailer’s website,” he said.
Why does “shrinkage” occur?
The phenomenon of “shrinkage” is nothing new. The practice is typically triggered when inflation rises and business costs rise.
When costs rise, manufacturers of consumer goods look for ways to offset the increases they pay for freight, transportation, labor, and other expenses. They increase the prices of existing products or reduce the size of existing products, thereby increasing the price per unit of what you receive.
These increases are passed on to shoppers through stores, who buy products from consumer goods companies.
Other recent examples of shrinking products that Dworsky noticed were Keebler Cookies. He said the Chips Deluxe package with M&Ms had dropped to 9.75 from the previous 11.3 ounces per package.
Shoppers alerted him to new Gatorade bottles that hold less drink (28 fluid ounces versus 32 fluid ounces) and a change in Pantene conditioner packaging to a slimmer squeeze tube that also holds two fewer ounces of the product .
“For consumer products companies, raising prices to consumers is a last resort. That’s because in-store price increases are highly noticeable to shoppers and can influence demand,” said Mark Cohen, director of retail studies and adjunct professor at Columbia University’s business school.
Instead, companies make subtle adjustments to products and packaging. “For consumers, that’s kind of a nuisance … or a concern depending on the product we’re talking about,” Cohen said. “I think inflation is going to be here for a while and we’re going to see these product adjustments continue to happen.”
— CNN’s Nathaniel Meyersohn contributed to this story