Edit: thanks to everyone especially those of you that have really detailed answers. I’ve learned a lot .
In: 448
In addition to what others have written, keep in mind that shrinkflation usually happens all at once. So, ice cream stays at a half gallon for a decade, and Breyers (or whoever) has decided that the price shouldn’t go above $3.99. So after a decade at $3.99/half gallon, Breyers introduces a smaller, 1.5qt container at the same $3.99 price. To the consumer it’s “25% inflation”, but in reality it’s the first change in a decade, so it only averages 2.5% over that time period.
If they raised prices with inflation it would go $3.99, then $4.11 the next year, and $4.23 the following year, etc. But since the $3.99 price point is psychologically important, they keep the price there for years until jumping it all at once (or shrinking the package sizing).
It also usually happens when there’s a period of higher inflation that puts pressure on the manufacturers or growers, so everyone usually raises their prices all at once.
Latest Answers