craigmcn

There’s a particular kind of dishonesty that works precisely because it’s so boring. Shrinkflation (the practice of making a product smaller while keeping the price the same) doesn’t make headlines the way a 20% price spike does, and that’s entirely the point. Manufacturers have known for decades that consumers are more sensitive to price changes than to package size. So when input costs rise, the quiet move is to shave 10% off the product and say nothing. You’re paying more per gram. You’re just not supposed to notice.

The psychology here is worth sitting with. We check prices. We compare prices. We feel the sting of a price increase in a way that registers emotionally. But we don’t weigh our yogurt containers or count the sheets on a toilet paper roll. Research published in Marketing Science found that consumers are considerably more sensitive to price than to product size: a 1% price increase reduces sales by about 1.19%, whereas a 1% size decrease reduces sales by only about half as much. Shrinkflation doesn’t just exploit inattention. It’s engineered around it.

What makes this more than a consumer nuisance is how it distorts the official picture. Statistics Canada’s Consumer Price Index tracks prices, not quantities. When a 400g coffee tin quietly becomes 340g at the same price, that’s not captured as inflation even though your grocery bill tells a different story. The effect is that headline inflation figures likely understate the actual squeeze on household budgets, and the squeeze lands hardest on lower-income households, who spend a higher proportion of income on food and staples, exactly where shrinkflation is most prevalent. France has moved toward mandatory labelling when products shrink, which is a reasonable idea that would never survive a Canadian parliamentary session.

I don’t think shrinkflation is some grand conspiracy. It’s just companies doing what companies do when they can get away with it, which is to quietly take more while giving less. The problem is that our measurement tools weren’t built to catch it, our labelling rules don’t require disclosure and our attention is elsewhere. The gap between what inflation looks like on paper and what it feels like at the till isn’t a statistical quirk. It’s a design feature.