Here in the U.S. inflation rose 8.5% between July 2021 and July 2022. As inflation pushes costs higher, you might have noticed other changes in your shopping cart courtesy of shrinkflation.
Shrinkflation happens when the product size shrinks, but the sticker price remains the same. It’s a relatively under-the-radar way for companies to maintain their profit margins without raising the price for a product.
At first glance, noticing the difference on a grocery store shelf can be challenging. But the result of shrinkflation is that you are stuck spending the same amount of money for a smaller amount of a particular product. And you’ll quickly catch on to how it’s impacting your purchases.
With most feeling the pinch of inflation on their wallet, shrinkflation is an unwelcome development.
If you are worried about this phenomenon’s impact on your finances, let’s explore some ways you can avoid shrinkflation altogether.
Ditch brand loyalty
Many of us are creatures of habit. But when shrinkflation strikes, it might be time to make a change.
Micheal Collins, professor at Endicott College and founder of WinCap Financial, says, "just because you've always bought a certain brand doesn't mean it's still the best value. Be open to trying new products and brands, especially if they're on sale."
If a similar product offers a better value, it might be worth switching up your grocery list.
Give generic products a try
When looking at the other brand options, don’t overlook generics.
Matt Gray, CFP, says buying the store brand is one way to get a better price on a nearly identical product. Gray explains, “Usually the store brand is still made by a major manufacturer, and they buy it from them and re-brand it so the products are still good.”
According to a study conducted by Consumer Reports back in 2012, many store brands are deemed equal in taste to their name-brand counterparts.
If you are looking for savings, many generics deliver on both quality and price.
Scope out the per unit price
When shopping for a product, check out the price per unit. Collins says, "the unit price (price per 100g, for example) can help you compare products of different sizes and ensure you're getting the best value."
Typically, the price per unit is available right on the grocery store shelf. But if it's not, you can run calculations by dividing the total price by the quantity. For example, if a dozen eggs cost $5, then the price per egg is 41.6 cents.
When shopping for a particular product, different stores may offer different prices. With that, it can pay to shop around.
Maggie Tucker, co-host of the friends on FIRE podcast, recommends reevaluating where you're spending your money. She says, "Consider switching to a discount store like Aldi where the store brand products are high quality and significantly cheaper than other brands and stores."
Stock up during sales
When you spot a good deal, stock up if you can, non-perishable goods are the easiest to store when you see a sale. For example, finding cleaning products or paper towels on sale could lead to worthwhile savings.
In most cases, storing perishable goods isn't an option unless you want to freeze some of your groceries.
To find the best sales, check out the weekly flyers and grocery coupons of the different supermarkets in your area.
Personally, I take advantage of the opportunity to stock up when I see a "buy one, get one free" sale on any pantry items that my household uses regularly.
Sometimes couponing gets a bad rap as a time-consuming chore. But the reality is that a minimal amount of time can lead to worthwhile savings.
Andrew Latham, CFP and content director of SuperMoney, says, "Couponing can save you a big chunk of change every month, but it only works if you use coupons for things you were already planning to buy, and you don't waste hours on it."
He advises, "Just remember that coupons are nothing more than ads designed to pull you into the store. If you clip a coupon for a product you were already going to buy, you and the store win. You lose if you buy a product just because it's on sale."
Buy in bulk, when it makes sense
The option of buying in bulk can often help you lower your cost per unit. But it’s not always the right move for your budget. After all, you’ll have to spend more upfront to lock in the discount.
John Brown, a former financial analyst and contributor at GetCash, offers a solution to those without the budget to spring for a major bulk shopping run, “I suggest you coordinate with those around you — family, neighbors, colleagues, and friends — with similar food preferences or diets. You can collectively list essential items and designate one person to go grocery shopping.”
Brown shares that “doing this will save you money as you only get what you need and nothing more.” Although it’s a bit more involved than most shrinkflation strategies, it could help you lock in significant savings without stretching your grocery budget too far for one shopping trip.
Try your hand at DIY
Another way to avoid the pinch of shrinkflation is to evade the purchase altogether by making the product yourself.
Tucker says, “You can save hundreds and maybe thousands a year by making your own cleaning and laundry products at home.” Simple recipes are accessible with a quick internet search. Or you can check out our own DIY cleaning product recipes.
But make sure that the costs of making the product, including your time, don’t outweigh the potential savings.
Face shrinkflation head-on
Shrinkflation is putting pressure on already tight budgets. If your budget is feeling the pinch, facing the challenge head-on is critical.
Although it might require some shifts in your regular shopping habits, it’s possible to avoid the brunt of shrinkflation with smart shopping strategies.
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