'Shrinkflation' Examples Appear Online as Consumers Notice Product Changes

Size will matter more for Americans in the coming months as rising costs spur manufacturers to make products smaller.

Some see the phenomenon of "shrinkflation"—a portmanteau word which British economist Pippa Malmgren is generally credited for inventing in 2009, as a stealth tactic by companies to offset their expenses without affecting their retail price.

But with annual inflation in the U.S. at 9.1 percent in June, the highest since 1981, manufacturers are acting as the costs of production increase, and their profit margins decrease.

When confronted with higher costs for key materials and labor, manufacturers have three choices, according to consumer advocate Edgar Dworsky.

The first is to raise the price, but risk the ire of consumers; the second is to reformulate the product with cheaper ingredients; or, they can make the product smaller, but keep the same price. The final option is one many companies choose because often it is less noticeable for consumers who are usually warier of price hikes for products than package sizes, Dworsky told The Washington Post.

Bill Dendy, financial strategist and president of Texas-based Alicorn Investment Management, told Newsweek that shrinkflation can be "a good thing if consumers are given choices."

"When people are budgeting for what they're going to spend on different items, especially those who are just making it week to week, having the ability to buy a slightly smaller package of whatever it is they're buying [allows them to get the product] at the same price as they had been accustomed to in the past," Dendy said.

He said the problem comes when companies make the stated changes hard to find.

"What I don't like about it is oftentimes it's unclear and it's done in a way to be as secretive as possible so that you really have to read the labels to see that you have gotten less product," Dendy said. "That's where I think a lot of people feel deceived by the manufacturers. As one manufacturer starts doing it, if they don't lose market share, that only encourages the competition to do the same and so you start having new standards set."

Consumer website Mouseprint.org lists a number of examples of downsizing and skrinkflation, and said that paper towels and toilet paper are "two common culprits when it comes to downsizing."

The site said Sparkle paper towel packages went from 116 "pick-a-size" sheets to 110. Utz is now taking 2 ounces of pretzels out of its "big" jars which are now 26 ounces instead of 28. Meanwhile, P&G downsized Dawn dishwashing liquid from 7.5 ounces to 6.5 ounces, with both bottles scanning $1.79, according to Mouseprint.

Newsweek reached out to Sparkle, Utz and P&G for comment.

The prospect of more manufacturers following suit with their products has put the onus on consumers to be more conscientious at the store and examine shelf tags for the price per ounce, pound or sheet if they don't want to unwittingly downsize, Dendy said.

Customers are also advised to look out for sales, take advantage of deals and digital coupons, consider store-owned brands, and be cautious when looking at how products are labeled, according to Dworsky who told the Post that people should not be fooled by the words "new and improved." This phrase might simply mean that a packet of laundry detergent, for example, cleans fewer loads than it did before.

Alarm bells should also ring for labels that say "family or party size" which does not necessarily mean you are getting a better deal and consumers should buy by the weight of a product, according to Dworsky.

Meanwhile, Dendy said consumers will have to become savvier retail shoppers.

"I do think it's incumbent upon the consumer to become more aware," Dendy said. "And so shopping becomes more of an exercise and not as easy perhaps it was in the past and a lot of retail stores have taken a couple of steps for us by indicating what are you paying per ounce."