She's On The Money - What is Shrinkflation?

Episode Date: February 13, 2024

Have you ever gone to grab your favorite packet of bikkies from the supermarket and noticed it was smaller, but more expensive than ever? Shrinkflation is when brands start selling less for more by reducing the size of their products but keeping the price the same and it is rampant right now! From Glad Wrap to Freddo Frogs, nothing is safe so today we discuss shrinkflation and other sneaky tactics that brands use to maximise profits, and minimise what you get for your dollar. Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements.The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs.  Victoria Devine and She's On The Money are authorised representatives of Money Sherpa PTY LTD ABN - 321649 27708,  AFSL - 451289.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kernai, Wolperi and Awadjeri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjeri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money.

She's on the money. Have you ever gone to buy something you've bought a million times and noticed something was a little different? Like maybe it was smaller? Well, chances are you haven't suddenly grown, but it has gotten smaller. You're not being gaslit. It's called shrinkflation. We are talking about it on today's show.

My name is Bec Syed and this is She's on the Money. Hi, Vicky D. Hello. Are you excited for this episode? Becky S. Like it's not as good as I do it back. That kind of sounds good. Becky S.

I'll take it. You know what? I'll just call you back. It's all good. Okay. It's all good. Shrinking my name. Yeah, exactly.

I didn't even know you could shrink Beck. You can do Beck. Or just B. Just B. B, Beck, same amount of like. It's the same amount of effort, isn't it? Yeah, no. All right, well, let's move on because we're talking about shrinkflation today.

And I am salty about this, guys. Like, we'll get to the English muffin conundrum a little bit later. But shrinkflation, as you introduced, is basically when a brand starts selling less for more by reducing the size of their products, but keeping the price the same, which is just really rude. We all want more Tim Tams, not less. Listen up. Sneaky, sneaky, sneaky. So usually these changes aren't that obvious. So in some cases, you only realize the product is smaller when you open the packet and find one less biscuit or bar or cake or whatever it is. I feel like sometimes you don't even notice it's somebody else pointing it out and being like, oh, Bec, did you know that

they have two less biscuits in this packet? And you're like, you're right. It used to be 10. what the heckin'. And you can't mentally prepare for something like that. You don't know what's coming. It's so rude. It's really, really sad. It's one of those things that grinds my gears. And so I said to you, let's do a whole episode on it. And here we are. It's mainly a therapy session, I would say. I'm going to let loose because you know what you shouldn't get between? A pregnant woman and her English muffins. That's true. Actually, no true words have ever been spoken. But a little bit later in the episode, we are going to talk about specific products. So hold onto that English muffin story. Oh, we're going to name and shame. I'm kind of scared,

but we are going to give you some tips on how to spot it and what other tricks to be wary of in the supermarket. But first, V, what is happening to the cost of food in Australia right now? Oh, it's cooked back. It's absolutely cooked in my scientific opinion. Not pun intended. No, no, no, no. Actually, that was pretty good. That was pretty good. We are funny. We are. We should go out on our own and do a comedy podcast. Okay. No, not me. I'm not funny. But the price of food staples is definitely rising and it is putting a lot of pressure on household budgets. A study by Deakin University recently released in August, Bec found, I've written down four dot points, are you ready? I'm ready. Milk prices rose by 20% in the 24 months to July this year. Whoa.

In the past 12 months, egg prices have increased by 10%. Canned tuna, she's a staple. She's up by 25%. That one feels random. That one feels real rude too because that's like everybody's cheap budget uni meal, right? Totally. Like if you're having a bit of a week where there's too much month left in your budget. Yes. I feel like canned tuna, some rice, some frozen veggies always whips up a quick little tuna mornay and it's cheap. 25% more for your tuna. It feels, I don't know, like maybe call me ignorant, but like fish are not charging more for their own. That is not the logic behind it, but I love it. How are they getting more expensive? I don't know. Do you know what I find even more rude about this? What? Frozen veggies. They're

up by 18%. And is that not meant to be the cheaper option, Bec? It is. That's a real shame. What the heck, En? V, certain businesses did do very poorly and some did really well, actually, over the pandemic. It definitely wasn't the toilet paper companies doing poorly. Well, that's for sure. But supermarkets did really well over the pandemic. They did. And, you know, the rich get which are, as they say. Yes, the pandemic felt like it was a bit of a license for supermarkets to basically print money. So at the same time that Deakin Uni, their analysis came out in August, Woolworths net profit increased 4.6% to $1.2 billion for the full financial year, while overall sales hit $64.29 billion, derived from its Australian and New Zealand supermarket

operations, as well as discount chain, Big W. And our second biggest chain, Coles, also revealed a 4.8% full year profit of $1.1 billion. Wow. I feel like I should be surprised, but maybe I'm not. I don't know if you've noticed, like complete side note, have you seen the news that's coming out where they're putting like all of these like safety gates and stuff in at the supermarkets because they're obviously trying to lower theft. Did you think that maybe if you lowered the prices so people could afford groceries, maybe they wouldn't steal them? Because it's not like you're not making profit.

Yes. Like we literally have your annual reports here and Coles made $1.1 billion profit and Woolworths obviously had sales of over $64 billion. Like you guys are kind of cooked because you're coming out here saying is significantly eating into our profits if people are stealing food. Do you know people go to Coles and they do steal food when they can't afford it? Yeah. It's an unwritten rule, Bec. Like if I look over and there might be somebody putting an avocado through as a brown

onion, I didn't see it. I didn't see it. That's not my business. Like that's not my business. I'm no snitch. Like I don't know your life, your job. It's not my point. Obviously that's illegal and we shouldn't be doing it. But like, I'm not going to snitch on somebody who's trying to do the best. I don't want to sound like a boomer. I also don't want to say the word boomer. Definitely have a boomer opinion in this circumstance, I think. I think so. We're on that side. But, you know, if things weren't automated and we didn't have self-checkout, we had actual people serving us, then... Or actual people who got paid actual wages. Then maybe people would be able to put... And they were replaced by robots. Exactly. We couldn't put our mincemeat through as brown

onions. That's so strange. Is that really old of me to say? Yeah, but that would impact their profit, Bec, you see. They would make less profit if they had to pay more wages. And obviously, paying people a living wage is just a bit too much to ask. That makes sense. Yeah. So don't do that. Don't ask for living wages and the ability to afford mincemeat. My gosh. I know. That is a lot to ask, actually. Why is shrinkflation all of a sudden a thing? It's not all of a sudden a thing. It's like been around for a very long time, but it's happening globally and brands and supermarkets. I feel like are getting away with it. Oh.

Like, you've probably heard of it. We just complain a little bit and then we go back to our normal lives. Like, people don't notice it. Obviously, after the break, I'm going to name and shame my favourite products that have been shrink-flated. And it's not because when you were little, things seemed bigger. Mm-hmm. Like, you know, when you were little, you're like,

oh, that used to be massive. And then you see it when you're an adult. You, like, gaslight yourself. You're like, oh, it must be because I'm bigger. Totally. Right. It's like when you used to, like, drive past the McDonald's sign and you'd see the Mac is signed, you'd be like, wow, those golden arches are huge. And now you

drive past it and you're like, hmm, like it's just a sign, Victoria. Like it's not, you know. Totally. As big as you think it is. But the truth is some of our favourite products have shrunk. Yes. We're not gaslighting ourselves anymore. We're just going to call it out. But obviously it's happening globally and I've had enough. So we're doing a whole podcast on it. Who knows? This is probably going to fall on deaf ears, let's be honest. But in this cost of living crisis, many brands don't actually want to be putting their prices up because

customers might turn away from their products or, you know, look at a company and be like, oh my gosh, like I can't believe in a cost of living crisis, Bec. They're putting up their prices, the audacity. So they're taking stuff away from us, hoping that we don't notice. And by not being transparent about these changes to their product, I just think that's really deceptive and I don't like it. Brands should honestly be so upfront about this and not try and hoodwink customers. Like how many times have you seen the advertising on a packet? You know, where they're like, oh, you get a bonus one razor in this packet or you get a bonus two extra biscuits in this packet.

There should be some kind of law where if you're going to reduce a packet size on a standard product, you have to be like, by the way, there's two less biscuits in here now. I can't believe that's not a legal requirement. What if I need a sleeve of Marie Claire biscuits to make a recipe and you're going to take some Marie Claire biscuits away from me and now I've put too much butter in my recipe? Totally.

Because one pack used to get you a whole thing. A whole cheesecake base. I don't like it. Now I might have to buy more. But there is evidence that supermarkets have used the pandemic and subsequent cost of living crisis to not only sell more goods but also increase their profit from sales. Critics call this inflationary profiteering, Bec,

although there has been minimal response from the government and regulators. No one's talking about it. That's really, really. One out of ten. Well, I'm not happy about that. All right. In France, though, big food manufacturers have promised to lower prices amid a threat from the government to impose financial sanctions,

given prices of many wholesale foods have been falling for months. That's good. I think interpreting that as good. It's to protect the consumer. Yes. Absolutely. It's kind of saying like, hey, can't do this. Like, that's not okay.

God, I wish we'd do that here. Hey, Albo, can we talk about me getting more biscuits? I think we should maybe call Albo after this. We'll do it on the break. So stick around because after the break we are going to talk about some specific products that are doing this and also give you hot tips on how to spot it and what else to look out for. Straight under the bus. You're going straight under the bus. Straight under the bus. After the break, you're going to hear a list of brands that are never going

to sponsor this podcast. Stick around. Don't go anywhere. Okay, Via, we are back. We are. No one is safe. Not a single person. Not a single person, not a single product, not a single Freddo frog. Exactly. Good segue. What are some examples that you have noticed? The Freddo frog. It has decreased in size by 25%. One out of 10. Cannot recommend. This is one of those moments where I thought, okay, maybe it's just because I'm getting older. Yeah. Like they're not that big. They're not that big. No. Do you remember the giant Freddos and the giant Caramello koalas that people would sell at primary school for the fundraisers, right? They were all like a dollar and they were massive. And I remember only being able to eat

half probably because I was younger so this is definitely playing into it only being able to eat half because they were so like big anyway I recently found one by recently I mean like a year ago I found one that I'd stashed away in my bedroom at my parents house a million years ago completely off we're not going to open it but I looked at it and I was like oh is this like a super size one like where did this come from no it wasn't it was just the regular size oh but from the early 2000s. Wow. Bit rude. They do have those big ones, but you're saying it's bigger than the big ones. Yeah, absolutely. So they still have the big ones, but like they definitely are smaller. Yeah. And fun size, like any type of fun size chocolate bar. Like Beck, you know that when

you walk into our office at reception, there is a lolly jar, right? Anyone, it's free for all. Anyone can open the lolly jar and help themselves to like a little Snickers or a Mars bar. They're half the size that they used to be. Yeah, that's so true. Which is why I always grab two because obviously. This inflation is not going to get me. Exactly. Two little Snickers bars is one old school Snickers bar. So I agree with that. I have a bone to pick as well with my favorite muffins. I gave these guys a whole shout out on my newsletter a couple of weeks ago because I'm obviously obsessed with muffins at the moment, right? Specifically English muffins. But my favorite boutique English muffin company, $13.99 a packet, Bec. Used to be six in a packet. You'd

you're like, okay, well, maybe I'll buy a packet and only eat them on the weekend because they are pretty good with pro-mite and a little bit of avocado on the top of them. Bougie at home brunch. Now there's only four in a packet, same price. That is so sneaky. And I assume they didn't tell anyone about this. No. And I didn't notice until my husband was like, oh, have you got extra muffins? Because like I usually eat one muffin and he eats two or three muffins. Sure. And we didn't have that. I was like, well, if you eat three, that's the whole packet. And he's like, that never happens. what are you talking about? And I was like, the audacity. Oh, wow. Okay. I'm a little bit scared. And if they're listening to this. Drury Lane, that's unacceptable. Honestly, you should not

be getting in the way of a pregnant woman and an English muffin with butter and jam on it. Are you joking? It's a dangerous game to play. The audacity, honestly. But I think it's interesting because we all get up in arms about this, right? Like there are so many examples of different biscuit packets that have two less biscuits or packaging where you open it and it's got like, you know, it might be a pill packet and you might've got Panadol and there's just like blank rows. And you're like, what the heck is this? The packaging stays the same. So you pick it up off the shelf. You don't second guess it, but then there's less product in the package. What I'm going to do this week, actually, because I just love everyone being thrown under a bus. I'm going to do a thread

in our Facebook group of give me your best examples of shrinkflation. And I'm going to make everybody comment literal examples of what shrinkflation is. That's a good idea. I'm actually excited to see this. Yeah, it's going to be really funny because I think everyone's going to comment on it and be like, oh, I didn't even notice that one. Yes, exactly. Because like we're up in arms about, you know, a Freddo frog. Totally. But like, what about bigger staples? Like what about packets of pasta, packets of rice? Box of cereal. Exactly. Things that we actually have to purchase that are actually, you know, necessary during a cost of living crisis. I totally agree.

But you know how sometimes they sell the half loaves of bread now, just I guess for if you don't want to like be buying a whole one, but that's the exact same price as a regular loaf of bread. I think it's so unacceptable. It's not really shrinkflation, but it's still kind of like you're getting away with that kind of thing, you know. On that note though, I want to know, do you freeze bread? Sometimes.

times. What happens? Do you actually get through a loaf of bread before it goes off and you have to throw it out? Not usually. Beck! Not usually. I am like the queen of freezing bread. Like I buy bread, I chuck it in the freezer. That is it. That is how bread lives in our house. And one of my girlfriends came over to stay recently and she was like, do you have any bread? Like I'll make some toast because she stayed over the night. And I was like, yeah, yeah, it's just in the freezer. And she's like, what is wrong with you? And I was like, is this not how normal people store loaves of bread like is this not how this happens because like you pull the bread out sure in my house I don't know about you Beck but I basically just eat toast like I'm not making sandwiches with

the bread I don't need it to be super fresh although if you let it defrost properly it stays fresh right you chuck it in the toaster wham bam thank you ma'am fresh toast every single time it just defrosts really quickly because it's so skinny but how about the I would call it a wrestle maybe a tug of war between you and the bread oh you just make sure you separate the bread before you put it in the freezer. Like you're not like sectioning them, you're just pulling them apart so that when they go in, they're like loosely packed. You don't like, you know. Sure, sure. So Bec, if you're not freezing your bread, you should be freezing your bread because I just think it makes sense. I see where you're coming from. Let's face it, if you're throwing away

bread, one out of 10, poor form. Anyway, Neil Chahan, who is a shrinkflation expert, but you didn't know that existed, Bec, he began compiling a list of the worst examples of product downsizing that he's been able to find and I have them all for you right here. Are you ready? I'm ready. All right. So I've listed them out. In Australia, sizes are decreasing across the board for everything from household products to your favourite snacks. Gladwrap, straight under the bus. Gladwrap's bulk option shrunk by 25% with a quota value pack going from 400 metres to 300 metres in length recently. Oh, never would have noticed that. One out of 10. Buying Coke in a glass bottle which already costs more as you guys know because it clearly tastes better also comes

at a loss as the new bottles were found to hold 15 less of the soft drink wow pringles don't get me started pringles are the worst at shrinkflation they used to sell 165 grams of chips it's now reduced down to 134 grams but the company made the chips themselves smaller instead of shrinking their packaging. That's kind of clever. Kind of clever but like now when you pull them out like how am I going to make the Women's Weekly duck cake for my future kid if it doesn't have two Pringles as their mouth? Oh you got a Pringle as a duck cake okay I didn't know that. Or I'll make you one one day. Please. All right Smith's chips which are obviously crinkle cut are the only type of chips anyone should be eating got smaller as well with their bags going from 200 grams a bag

to 170 grams a bag in recent years. A standard block of Cadbury chocolate, which used to be 250 grams, is now 200 grams as of a few years away. It's recently faced another cut. We're now 180 grams a block for a Cadbury block of dairy milk. It's going to be zero grams soon. You're going to get like one bite. They're going to gaslight us into thinking that a whole block

of chocolate is the size of a Frodo frog soon. True, that's true. Food, Weet-Bix packets, gone from 1.5 kilos down to 1.2 kilos, which is a 300-gram reduction for the iconic breakfast, which has now, again, been reduced to 1.12 kilos. Wow. She's losing weight dramatically. Crunchy nut, it hiked its prices by 57% after losing 30 grams in 2022,

meaning shoppers went from paying 90 cents for the delicious cereal up to $1.41 for the same 100 grams. That's a lot. That is a lot. That's a lot. In many supermarkets, the 500 grams of Coddy's jams, they've recently been replaced with a 375 gram alternative, representing 25% as a decrease in size,

and the shelf price fell less than 7%. That's dodgy. You're getting less for more. Yeah. And Maxi Bon, which is obviously a very popular Peter's ice cream. Not the Maxi Bon. No, that has decreased in size. I mean, they did well and they actually publicly came out

and said, we're reducing the size. I don't know what kind of press they got from that, but it went from 102 grams for a MaxiBond down to 94 gram, which attributed to increased cost. Wow, I like that they added themselves. They were like, it's costing us more, so we're going to give you less. And I think people, we like that. We like transparency.

I like that a lot. We do. So you mentioned many of these examples do go unannounced, but is it like recorded or measured anywhere? Yes, CPI, my friend. So the ABS, they track the prices of goods and services year on year that make up household costs. It takes into account changes in product size as well, which is really good. They are treated as a price increase given the end result is that essentially you get less for your money than you were before and you need to buy more to compensate. So yes, the ABS tracks

it and CPI is really interesting because CPI is based on essentially the cost of goods and services that increase. But the way that they do that is by taking a basket of regular goods and services and measuring year on year how much that would cost you. So back in the 50s, a basket of goods and services, you know, from a supermarket would have cost you, let's pretend, $20. And now that same basket will cost you like $120. So it's interesting to go, okay, well, bread used to cost a dollar a loaf and now it costs like $7 depending on where you're getting it. So it's an interesting conundrum, but also, I don't know, as you guys know, love the ABS. I mean, you wouldn't want to check it every time you go out, but maybe I would. But what are the best ways in the shops to

determine the better deal and cross-compare similar items? Unit price. Hands down, it's now a legal requirement that every single sales ticket has the unit price on it. So it will say, oh, this is a dollar for 100 grams. And you can kind of compare the different products. You can say, oh, the home brand one is a dollar for 100 grams, but the branded version of, you know, rolled oats, which to me, I cannot tell the difference. Like I do not care how much money I end up having one day. I will always, always, always buy home brand oats. Yeah. Is there a difference? You cannot tell me that one is better than, I cannot see it. Anyway, it will tell you the difference between the products and what you're actually getting bang for buck. Because

sometimes they're like, you know, 375 grams versus 200 grams. And you're like, oh, well that 200 grams looks cheaper because it's a smaller box, but it might actually be more expensive because you're getting less for more. Gotcha. That makes sense. So obviously unit pricing is really important. It did become mandatory in 2008 to make sure that you're all good. Give an example of that. Obviously we mentioned before the Coddy's Jam, it went from 500 grams. It used to cost 60 cents per 100 gram spec the new 375 jar that sells for 75 cents per 100 grams so obviously the diminished jar appears in cole's quote everyday category implying that it's at a lower cost but you're actually getting less for more right one out of ten we don't like that no not at all also

home brand jam slaps like oh yeah you cannot tell me that jam isn't jam jam's jam right unless it's like that real bougie like raspberry jam that has the like patterned lid that looks a little bit french oh i know which one that's bougie but like you're just buying that when you get scones right totally exactly unfortunately there is actually no legal requirement for food manufacturers to alert customers of a change in their product size as we're saying before probably should but they don't have to so long as the new quantity and unit price is appropriately displayed so apparently it's on you but i don't like it those things i don't like it you need to also look out for changed packaging and buzzwords like new on the box or packet because this can indicate that a

product has shrunk but it probably has retained its old price. Okay. There's an app though Bec because obviously this is overwhelming. It is called Frugal. F-R-U-G-L. No E on the end. Which is an Australian grocery price comparison and list building app that might help you keep track of these changes. That's very good. I know right. I'm going to download that literally as soon as done here. Crazy. So what are some other things to keep an eye out for, if anything? Oh, my favorite is that two for one, where they're like, oh, get two for one or like, you know, buy two, get one free. Like it might not actually be cheaper. Also, you might be buying a product that you don't ultimately need lots of. Like how often do you actually buy that certain product? If it makes

sense for you, great. It might be a money win, but just keep an eye out because marketing, they spend millions of dollars each and every single year as a supermarket to work out how to sell you more stuff back. They know what they're doing. They know what they're doing. It's not some like nice thing where they're like, this week on our roll notes, we're going to do two for one. And you go, oh my gosh, how kind are they? Yeah. They're not being kind. They're boosting their sales. It's not the kindness of their own heart. Exactly. And then be wary of the way supermarkets are organized. So this is about user experience. They are designed to make you leave with more stuff. I don't know if you've noticed this, but all of the essentials of a supermarket are around

the outside edge of the supermarket when you walk in. So you'll have fresh produce and the deli and all the like milk and stuff will be across the back and the bread and the cheese will be on the other side. So you have to walk around. So inadvertently you have to go down the aisles for things that you might not necessarily need. And then they also try to upsell you at checkout. They're having all the gums and the lollies and the things sitting there so that you go, oh, actually I do need a gum. I'm going to jump in the car straight after this. Or I do need a drink or I do want this. Like they are smart. They have spent millions, if not billions on marketing and making sure that your user experience gets you into the store, but gets you buying more

in the store. So it's interesting to, I guess, look into stuff like that, but just be wary. To save money in a supermarket, one of the best recommendations is to stick to the outside and don't go down the middle aisles. Totally. I'm a sucker for checkout gum though. I've got to say, it always gets me. I knew you would be. It gets me every time. I just knew it was just a Beck thing to be into. It really is.

Those Mars bars. Anyway. When they're a dollar, you're like, well, it's only a dollar. It's going to save you money in the long run. Exactly. But it's a smaller Mars bar for a dollar. Oh, that's true. I think this is a really good place to leave it for now.

I couldn't agree more. I am done because I am mad about the muffins. Yes, let's go down lit frugal. Yep, 10 out of 10. And we would obviously love to hear from you. But happy Wednesday, my friends, and we will see you for Friday Drinks on Friday. Bye, guys. The advice shared on She's On The Money is general in nature

and does not consider your individual circumstances. She's On The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. If you do choose to buy a financial product, read the PDS, TMD and obtain appropriate financial advice tailored towards your needs. Victoria Devine and She's On The Money are authorised representatives

of Money Sherpa PTY LTD ABN 321 649 27708 AFSL 451 289.