Shrinkflation is an interesting topic because it combines two seemingly contradictory things: inflation and shrinkage. Once related to the heterodox fringe, it is now mainstream, and there is even a Wikipedia page about it:
Shrinkflation is a rise in the general price level of goods per unit of weight or volume, brought about by a reduction in the weight or size of the item sold. The price for one piece of the packaged product remains the same or could even be raised. This sometimes does not affect inflation measures such as the consumer price index or Retail Price Index, i.e. it might not increase in the cost of a basket of retail goods and services, but many indicators of price levels and thus inflation are linked to units of volume or weight of products, so that shrinkflation also affects the statistically represented inflation figures.
The ‘Zerohedge people’ were right all along, that the CPI ignores or overlooks hidden forms of inflation.
After accounting for shrinkflation, the inflation rate is as high as 20%, not 7% as purported by the CPI. Shrinkflation seems most prevalent in food items, which coincides with the obesity epidemic. This shows the infectiveness of portion control when Americans are so addicted to bad food and will pay more money to satiate their bottomless appetites.
Shrinkflation can be hard to detect due to deceptive packaging. For example, making a cereal box taller but narrow. It’s like the infamous bag of chips full of air, but applied to other things too.
There are other forms of hidden inflation, like planned obsolescence, which means that products intentionally have a shorter lifespan and need to be replaced more often. Or the quality of services degrading. Even vox.com, a mainstream publication, has observed that consumer goods may be getting worse.
Or out-of-control tipping, which has gotten a lot of media attention as of late. It used to be 10-15% was customary, but I am seeing tipping options as high as 40%. The argument you hear is that wages are low and that tipping is a way to offset this. This is effectively a tax/inflation on consumers for companies not paying high enough wages.
Another form of inflation, but more hidden, is the proliferation recurring services/billing instead of one-time purchases, which in the long-run is more expensive. Everything needs a subscription now, whether it’s video games, websites, content, or software. A common trend is a company releasing a feature or service and then later degrading it, to encourage people to buy a subscription to restore original functionality. This happens after the company transitions from ‘freemium’ to paid, and hoping enough users switch to paid to offset users quitting.
However, a notable exception to the trend of shrinkflation is trucks, which keep getting bigger and bigger. Trucks are downright monstrous now:
In 1999-2000 the Chevy Suburban and the Land Rover Discovery were considered uncommonly big SUVs, but even those have been dwarfed by these huge, extended-cab trucks, which are everywhere. Same for the H2 Hummer, discontinued in 2009, which in the early 2000s was something of a monstrosity at the time, but is still considerably shorter than the 2022 F-150 extended crew cab (190″ vs. 231.7″).
So why have trucks bucked this trend of shrinkage seen everywhere else? It would seem logical for truck manufactures to gradually make trucks smaller, to boost profit margins.
Maybe consumers want big trucks? But then food portions should be getting bigger, too. The fact that Americans are bigger and eating more than ever is an obvious indication of demanding more food.
Another possibility is that truck are also more expensive, so people are simply paying more money for bigger trucks, which would be expected.
Perhaps people are better able to discern car/truck shrinkage compared to food/consumer-goods shrinkage. Making a pickup truck shorter is more visually apparent and obvious compared to keeping a package the same size but putting less food in it. In the latter it would only be obvious if you looked at the weight or the per-serving cost, which most consumers don’t seem to do.