Everyday spending
What is shrinkflation? How to spot a hidden price increase
Learn how shrinkflation raises unit prices, calculate the increase when package sizes fall, and see how the CPI handles downsizing.
Compare quantity as well as the sticker price
A $5 package containing 16 ounces costs 31.25 cents per ounce. If it becomes a 14-ounce package for $5, the unit price is about 35.71 cents. That is a 14.29% unit-price increase, even though the package contains 12.5% less. The percentage increase and quantity reduction use different starting points.
Does official inflation count smaller packages?
BLS adjusts observed prices for quantity changes when it identifies product downsizing. Its shrinkflation methodology article explains how size changes can enter the CPI. It is therefore incorrect to assume all unchanged sticker prices are recorded as zero inflation.
A formula you can use in the aisle
Calculate old unit price = old price ÷ old quantity, then new unit price = new price ÷ new quantity. The percentage change is (new unit price ÷ old unit price − 1) × 100. Use the same unit on both sides. A per-ounce comparison against a per-pound label produces a meaningless result unless you convert first.
Keep the comparison fair
Check multipack counts, concentration, serving size, and whether the product changed quality. A concentrated detergent may contain less liquid but the same number of loads. A sale can also distort a comparison with the regular price. Save the previous receipt or package size when possible, and distinguish one product’s change from the inflation rate for your entire budget.
Is a smaller package always shrinkflation?
No. Compare price per equivalent usable quantity. If the price falls in proportion to the quantity, the unit price is unchanged. Quality or concentration changes may also affect the comparison.