(NewsNation) — President Joe Biden has repeatedly called out companies for downsizing products without lowering prices, but data suggests the practice known as “shrinkflation” is rare.
A new analysis by customer review website ConsumerAffairs shows product downsizing isn’t very common and is happening less now than roughly a decade ago when inflation was much lower.
Since inflation peaked in June 2022, companies have downsized 664 items, the report said, citing data from the Bureau of Labor Statistics (BLS).
That may sound like a lot of shrinkage, but when you consider the Consumer Price Index (CPI) tracks the prices of around 80,000 items each month, the number of products that have recently experienced downsizing represents a small fraction, less than 1%.
For perspective, between 2015 and 2016, there were more than 1,000 reports of downsizing in the CPI sample.
“We are not at the peak of downsizing and are, in fact, down from historical highs,” Ernest Baskin, associate professor of food marketing at Saint Joseph’s University, told ConsumerAffairs.
What is shrinkflation?
President Biden has blamed corporate greed for persistent inflation, accusing companies of scaling down products without reducing prices, also known as “shrinkflation.”
“Too many corporations raise prices to pad their profits, charging more and more for less and less,” Biden said in his State of the Union address.
It’s a message intended to reshape the narrative around high grocery prices, which are up more than 20% since 2021.
While it’s true shrinkflation has occurred, BLS research suggests it’s not a major driver of overall inflation. Even so, downsizing has had a bigger impact in a few categories, specifically household paper products and snacks.
From Jan. 2019 to Oct. 2023, about 10% of the price increase for paper towels and snacks could be attributed to producers downsizing, the office of Sen. Bob Casey, D-Pa., noted in a December report.
Consumers say they’re seeing it firsthand. Nearly three-quarters of Americans in a YouGov survey said they have noticed shrinkflation in food products. Recently, several videos have shown fast food customers complaining about smaller portions — a message that resonated across social media.
The disconnect between perceived shrinkflation and actual downsizing could be due to heightened awareness with more shoppers checking unit counts than in the past.
“This kind of comparison over these past few years has perhaps led to an overthinking of shrinkflation,” Leo Feler, chief economist at market research firm Numerator, told ConsumerAffairs.