Despite Attempts to Go Undetected, Shrinkflation Rankles Food Shoppers

At grocery stores and restaurants, as prices rise, containers are shrinking.

The United States Bureau of Labor Statistics (BLS) announced Thursday (Feb. 10) the January 2022 edition of its Consumer Price Index for All Urban Consumers (CPI-U), which looks at changes in prices across the U.S. The bureau found that food prices overall had risen 7%, prices for food eaten at home (i.e., grocery purchases) had increased 7.4%, and prices for food eaten away from home (i.e., restaurants) had increased 6.4%.

Additionally, the Index noted that, month over month, food prices had increased 0.9%, growing 1% for food consumed at home and 0.7% for food consumed away from home.

Given the fact that price increases can discourage consumers from making purchases and can engender some frustration among these shoppers, some businesses are taking a slier approach, hoping their efforts will evade detection from consumers. This so-called shrinkflation approach can be seen at restaurants and grocery stores alike.

In January, for instance, pizza quick-service restaurant (QSR) giant Domino’s announced that, in response to shortages and rising costs, the company was modifying its $7.99 carryout chicken deal.

“We’re not going to change the headline number because the equity around that $7.99 is so important, but we are going to move that offer to online only,” Domino’s CEO Ritch Allison said during a presentation at the 2022 ICR Conference. “And we are going to change the count on our chicken — our wings and boneless — from 10-piece to eight-piece to recognize some of these costs that we’re incurring.”

Effectively, Allison stated that consumers would be more disincentivized by a higher price than they are when they receive less food.

However, consumers are, in fact, taking note. Take, for instance, the Reddit thread r/shrinkflation, wherein consumers post instances of this shrinkflation, with new posts added every day and with many posts receiving hundreds of upvotes.

In an interview with The Wall Street Journal (WSJ) published Saturday (Feb. 12), Doug Baker, head of industry relations at FMI- The Food Industry Association, said that more such reactive measures to inflation are to be expected from businesses in the near future.

“There is a lot more to come,” he said, per the report. “Everything is on the table in an effort to deal with those cost increases, and at the same time, not make it too difficult for consumers to shop.”

Cost is a huge motivator for consumers at grocery stores, according to data PYMNTS’ study “Decoding Customer Affinity: The Customer Loyalty to Merchants Survey 2022.” The report, created in collaboration with Toshiba Global Commerce Solutions, found that price is the top-ranked factor influencing consumers’ choice of grocery store, proving more important than proximity, payment or fulfillment features or product or brand availability.

Additionally, the study, which drew from the results of a census-balanced survey of more than 2,000 U.S. consumers, found that 77% of consumers reported that low prices would improve their loyalty to their grocer, and 52% said the same of promotions and discounts.

Get the report: The Customer Loyalty to Merchants Survey 2022