Inflation is changing your favorite products for the worse.
Higher prices at the grocery store have been a concern since 2020, when prices slowly started rising as a result of inflation. High prices in every aisle have become a normality. As previously reported by TheStreet’s Alexa Back, beverages are seeing the impact of inflation the most, with frozen meat (+28%), milk (+17%), and chips (+26%) also seeing major increases.
Inflation’s Silver Lining
Many brands are benefitting from inflation because they can sell cheaper items to lure customers over. For example, Costco (COST) – Get Costco Wholesale Corporation Report, Walmart (WMT) – Get Walmart Inc. Report, Target (TGT) – Get Target Corporation Report, and Amazon (AMZN) – Get Amazon.com Inc. Report can sell some items at a lower cost or promote deals to make it seem as if the prices really aren’t that bad. These companies, especially Costco, can afford to lose money in some areas by making up for it in other higher cost categories.
However, not all brands are benefitting from inflation.
Domino’s (DPZ) – Get Domino’s Pizza Inc Report has seen inflation really affecting its business, with an 8-10% increase in its food basket cost, which is three to four times what it would normally see in a year. Because of inflation, the company has made changes to its national offers. The $7.99 carryout offer will have less food in it, reducing wings from 10 pieces to eight to combat costs.
Less Product for More Money
If you’ve noticed your staple items from the grocery store appearing smaller, weighing less, and decorated with more muted colors, you’re not alone.
Shrinkflation is when items shrink in size and quality. Because of inflation, companies that make your everyday products are having to pay a lot more for production costs. Changing the packaging is one way companies are coping.
In addition, supply chain disruptions are also making it more difficult to keep packaging the same because there are less supplies and resources available, causing some items to have less in them. For example, you may see less chips in a bag, less dish soap in a bottle, and smaller toilet paper rolls.
RRD Packaging Solutions, a packing company that is a leading provider of paper packaging products to the biggest brands, explains that as many as 81% of their clients have made changes to their products in the past year, whether that includes slimming down packages, using different colors on the packaging, or using less product in the package.
Some companies are pivoting towards changing the colors of their packaging because color affects cost. Completely white packaging is more expensive than a grey or brown paper made from recycled material. Some shoppers may see more brown and grey packaging as they walk down the aisles of their grocery store as a result of rising costs associated with packaging.
Some boxes or flaps on boxes are getting shorter, thinner, and smaller. This is all to attempt to reduce as much cost as possible when creating the product to get it out on shelves.
This harms consumers because you’re essentially paying more for less, while companies are able to skirt away from losing much profit while your wallet struggles.
