Shrinkflation nation: The hidden price hike in your shopping cart

Purdue researchers uncover alarming trends in product sizes as families struggle to maintain grocery budgets

By StudyFinds Staff

Purdue researchers uncover alarming trends in product sizes as families struggle to maintain grocery budgets

WEST LAFAYETTE, Ind. — If you’ve ever wondered whether that family-size cereal box is getting a little less family-friendly, you’re not alone. A report from Purdue University confirms what eagle-eyed shoppers have long suspected: our groceries are going on an unprecedented diet. In fact, over three-quarters of American consumers report noticing their favorite food products shrinking while prices stay the same. This practice, known as “shrinkflation,” has become increasingly prevalent in grocery stores across the nation, with snack foods being the primary culprit of this subtle downsizing strategy.

The October 2024 Consumer Food Insights report, conducted by Purdue University’s Center for Food Demand Analysis and Sustainability (CFDAS), found that 77% of consumers have noticed shrinkflation in their grocery purchases over the past 30 days. The findings paint a picture of widespread awareness among shoppers, though many may still be missing the signs of this stealth price increase tactic.

Snack foods lead the pack as the most commonly noticed category affected by shrinkflation, with 78% of respondents reporting smaller portions in their favorite treats. Following closely behind are packaged desserts and sweets at 53% and frozen foods at 48%. The trend appears to be particularly noticeable to households with children, who report seeing shrinkflation across a broader range of product categories compared to households without children.

While consumers are becoming increasingly aware of shrinkflation, they may not be equipped to detect it effectively. The study revealed that while 82% of shoppers regularly check the overall price of items they’re buying, only about half consistently check the unit price or product weight – key indicators that would help spot shrinkflation in action. This disconnect between price awareness and size awareness may explain why many instances of shrinkflation go unnoticed until the change becomes obvious.

“A variety of factors may influence a producer’s decision to downsize a product’s size, such as rising costs in the supply chain and inflationary pressures,” explains the report’s lead author, Joseph Balagtas, a professor of agricultural economics at Purdue and director of CFDAS, in a media release. “The goal is to better understand how consumers perceive these reductions and if they have noticed them happening at all.”

The research team put consumers to the test with a theoretical scenario: Would they prefer their favorite snack to maintain its current price of $3.00 but decrease from 6 ounces to 5 ounces, or keep the 6 oz size but increase to $3.60? Interestingly, despite the identical unit price in both scenarios, 53% of respondents chose the size decrease over the price increase. This preference suggests that psychological factors may be at play in how consumers perceive and react to different types of price adjustments.

The study also uncovered strong feelings about corporate transparency when it comes to shrinkflation. Three-quarters of consumers believe companies should be legally required to clearly label when products have been reduced in size or quantity. Many view shrinkflation as a profit-driven strategy rather than a necessary response to rising costs, with a majority agreeing that companies use it to increase profits even when cost pressures aren’t present.

This skepticism appears to have potential consequences for brand loyalty. A significant portion of consumers reported being less likely to trust brands that practice shrinkflation, and many indicated they would switch to different brands if they noticed their regular products shrinking. This suggests that while shrinkflation might help companies maintain profit margins in the short term, it could risk damaging customer relationships in the long run.

“It is interesting yet not entirely surprising to see this sentiment as articles about grocery prices, accusations of corporate greed and shrinkflation continue to circulate in popular news media,” notes Balagtas.

The research also uncovered interesting patterns in how different household types interact with the food system. According to Elijah Bryant, a survey research analyst at CFDAS and co-author of the report, households with children are more likely to experience food insecurity, with 17% reporting difficulties accessing adequate amounts of nutritious foods, compared to 13% of households without children.

Families with children also show distinct shopping and eating patterns. They tend to eat more meals from restaurants, fast food establishments, and cafeterias compared to households without children, with a larger portion of their food-away-from-home budget going toward delivery and takeout options. Bryant notes that these households also more frequently choose foods labeled as “sustainable” or “ethical,” such as wild-caught fish, cage-free eggs, plant-based proteins, or organic foods.

The study revealed some unexpected findings regarding food safety behaviors. Households with children are more likely to engage in what researchers term “risky food behaviors,” such as eating rare meat, unwashed produce, or raw dough. They’re also more prone to discarding food that has passed its use-by date.

Another significant finding relates to health claims and food beliefs.

“The largest differences we observe between households with and without children come in the agreement with health-related claims,” Bryant says.

Families with children are more likely to believe that organic food is more nutritious and that both gluten-free food and plant-based milk are healthier options.

The study also explored broader food spending patterns, revealing that American households are spending an average of $197 per week on food (a 5.9% increase from the previous year and an 11.2% rise over two years), with $123 going to groceries and $74 to restaurants and takeout. Families with children are more likely to opt for delivery and takeout options, with 58% of their food-away-from-home budget allocated to these convenient alternatives compared to 50% for households without children.

Consumer estimates of food inflation remain at 5.4%, with expectations for future food inflation hovering around 3%.

In an era of rising food costs and increasing inflation concerns, shrinkflation has become a notable strategy for food companies to maintain profit margins without obvious price increases. While consumers may prefer this approach to outright price hikes, the practice raises questions about transparency, trust, and the long-term relationship between brands and their customers. If anything is now clear, it’s that while the size of the package may be shrinking, consumer awareness is growing.

Paper Summary

Methodology

The study collected data through an online panel maintained by Dynata over five days in October 2024. The researchers surveyed U.S. adults aged 18 and older, using a weighting method called iterative proportional fitting to ensure a demographically balanced sample. This technique adjusted the results to match population proportions for age, sex, race, census region, income, and SNAP participation, based on the most recent Census data from 2023. The survey included both returning respondents from previous months and new participants to maintain a consistent sample size.

Key Results

The findings revealed that 77% of consumers noticed shrinkflation in the past 30 days, with snack foods being the most affected category at 78%. The study found significant differences between households with and without children in their shopping behaviors and awareness of shrinkflation. Families with children showed higher awareness across multiple product categories and were more likely to engage in label-checking behaviors. The research also uncovered important insights about food spending patterns, with the average household spending $197 weekly on food, and revealed concerning disparities in food security between households with and without children.

Study Limitations

While the study provides valuable insights into consumer awareness and attitudes toward shrinkflation, it relies on self-reported data, which can be subject to recall bias and perception issues. The online panel format may not fully represent all demographic groups, particularly those with limited internet access. Additionally, the study’s focus on the last 30 days may not capture longer-term trends in shrinkflation awareness and its effects on consumer behavior.

Discussion & Takeaways

The research highlights a growing awareness of shrinkflation among consumers and suggests potential consequences for brand loyalty and trust. The findings indicate that while consumers may prefer shrinkflation to direct price increases, they desire more transparency from food companies about product size reductions. The study also reveals important differences in how families with children experience and respond to these changes in the food retail landscape, pointing to broader implications for food security and household budgeting strategies.

Funding & Disclosures

This research was conducted by the Center for Food Demand Analysis and Sustainability at Purdue University. The study appears to be part of their regular Consumer Food Insights report series, though specific funding sources are not detailed in the report. The research team included Joseph Balagtas, Elijah Bryant, and Caitlinn Hubbell, with contact information provided for additional questions or clarifications.

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