New York (CNNBusiness) Slimmed down toilet paper, less cookies in the bag, less conditioner in the squeeze tubes.
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.
Record levels of inflation mean households are paying more for everyday purchases and it costs companies more to produce packaged products such as paper products, shampoos, and food and beverage products.
Companies can raise prices, and many do. Others charge customers the same price while offering less.
Product shrinkage, also known as “shrinkage,” is what happens with toilet paper, said Edgar Dvorsky, a former assistant attorney general in Massachusetts who is a consumer advocate and editor of the website ConsumerWorld.org.
“The reduction occurs during times of high inflation because companies that make everyday products also pay more for raw materials, manufacturing costs and shipping costs,” said Dvorsky, who tracks how periods of high inflation affect consumer products for three decades.
Dvorsky said product downsizing is becoming more common, and recently he’s noticed several cases of brands subtly downsizing their products.
For example, Procter & Gamble’s (PG) Charmin Ultra Soft Toilet Paper 18 Count Mega Pack now contains 244 double-ply sheets, down from the previous 264 double-ply sheets per roll. And the brand’s super mega rolls now display 366 sheets compared to the previous 396 sheets per roll.
“That equates to losing the equivalent of about a roll and a half in the new 18-pack,” he said.
Dvorsky noted that large packages of toilet paper are now most commonly stocked in stores. “It’s almost impossible to find a four-pack,” he said.
Although he doesn’t track product prices, Dvorsky said when product downsizing occurs, consumers end up either paying more for less of the product or the same price for less of it.
“This does not mean that every toilet paper product from Procter & Gamble will see a change. But my guess is that more product changes are coming,” he said, adding that there would be a report forthcoming on other toilet paper brands.
In its latest earnings call, Procter & Gamble executives acknowledged that the company faces a “challenging cost environment” due to the ongoing effects of the pandemic on supply chains, a tight labor market and as “materials availability remains stretched.”
As a result, P&G said it was raising prices for its retail customers on 10 product categories, including laundry detergent, dryer sheets, baby and feminine care products.
In an email to CNNBusiness, Procter & Gamble cited various reasons for variations in its product sizes and that store prices are determined solely by retailers.
“There is a cost element to innovation – adjusting the pack count or pack size is one way to reinvest in that innovation while maintaining a competitive price point,” the company said.
P&G said it also tailors product sizes to different retailers. So the rolls may have shrunk in some shops but not in others.
“For the same retailer, the assortment you find in a suburban location may vary from what’s in a smaller urban retail location — and what’s on the retailer’s website.” , it says.
Why “shrinkage inflation” happens.
The phenomenon of “shrinkage inflation” is nothing new. The practice is usually triggered when inflation spikes and companies’ costs rise.
When costs rise, manufacturers of consumer goods look for ways to offset the increases they pay for goods, transportation, labor and other costs. They either increase the prices of existing products or reduce the sizes of existing goods, thus increasing the cost per unit of what you get.
These increases are passed on to shoppers through stores that buy products from consumer goods companies.
Other recent examples of discounted products spotted by Dworsky are Keebler cookies. He said the Chips Deluxe package of M&Ms dropped to 9.75 from the previous 11.3 ounces per package.
Buyers alerted him to new Gatorade bottles that hold less drink — 28 fluid ounces, down from 32 fluid ounces — and a change in Pantene conditioner packaging to a slimmer squeeze tube that also holds two ounces less of the product .
“For consumer product companies, raising prices for consumers is a last resort. That’s because in-store price increases are highly noticeable to shoppers and can affect demand,” said Mark Cohen, director of retail studies and assistant professor at Columbia University’s business school.
Instead, companies are making subtle adjustments to products and packaging. “For consumers, it’s kind of an annoyance … or a concern depending on the product we’re talking about,” Cohen said. “I believe inflation is going to be here for a while and we’re going to see these kinds of product adjustments continue to happen.”
— CNN’s Nathaniel Myerson contributed to this story