While everyone's talking about toilet paper shortages and the rising cost of gas in the post(?)-COVID world, here's something I've noticed:  many products that I routinely buy have suddenly started appearing on store shelves in smaller packages - usually the same (or even sometimes higher) price.  It's not a new phenomenon; it's been going on since the start of capitalism.  But, it's getting attention in the news these days - and it has a name:  shrinkflation.

Before we delve into this age-old situation as it relates to 2021, let's establish a definition.  Investopedia - an online portal of information about the investment world  - defines shrinkflation this way:  It's "the practice of reducing the size of a product while maintaining its sticker price.  Raising the price per given amount is a strategy employed by companies, mainly in the food and beverage industries, to stealthily boost profit margins".  Said differently, one day that box of 80 widgets that sells for $10.00 suddenly has only 60 widgets in it - and it's sale price is the same - or, maybe it even costs more than before.  Same price, less product, consumer doesn't (or hardly) notice(s) it, and the company walks away with a bigger profit margin.

Again, this isn't a new concept.  But it is gaining traction in the news as consumers and businesses recover from the COVID-19 pandemic.  Customers are leery of rising prices and businesses and manufacturers are looking to make up profit they lost over the past year.  While inflation is typically the scourge of a struggling economy, this time around it just might be shrinkflation - in a stealth manner.

Check the news.  There are all sorts of examples of shrinkflation as it pertains to breakfast cereal, toilet paper, paper towels, snack chips, ice cream, coffee, and more.

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What might be different this time (post-pandemic) around is that some companies might not be inflicting shrinkflation on their customers simply to make more money.  The news is also full of stories of companies that are trying to balance their own supply-chain problems and labor shortages by altering the size of their product as to keep prices manageable.

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