Community | March 30, 2011 | 6 comments

Food Inflation Kept Hidden in Smaller Bags

source: http://www.cnbc.com/id/42315625

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Schnookums
Chips are disappearing from bags, candy from boxes and vegetables from cans.

As an expected increase in the cost of raw materials looms for late summer, consumers are beginning to encounter shrinking food packages.

With unemployment still high, companies in recent months have tried to camouflage price increases by selling their products in tiny and tinier packages. So far, the changes are most visible at the grocery store, where shoppers are paying the same amount, but getting less.

For Lisa Stauber, stretching her budget to feed her nine children in Houston often requires careful monitoring at the store. Recently, when she cooked her usual three boxes of pasta for a big family dinner, she was surprised by a smaller yield, and she began to suspect something was up.

“Whole wheat pasta had gone from 16 ounces to 13.25 ounces,” she said. “I bought three boxes and it wasn’t enough — that was a little embarrassing. I bought the same amount I always buy, I just didn’t realize it, because who reads the sizes all the time?”

Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.

Five or so years ago, Ms. Stauber bought 16-ounce cans of corn. Then they were 15.5 ounces, then 14.5 ounces, and the size is still dropping. “The first time I’ve ever seen an 11-ounce can of corn at the store was about three weeks ago, and I was just floored,” she said. “It’s sneaky, because they figure people won’t know.”

In every economic downturn in the last few decades, companies have reduced the size of some products, disguising price increases and avoiding comparisons on same-size packages, before and after an increase. Each time, the marketing campaigns are coy; this time, the smaller versions are “greener” (packages good for the environment) or more “portable” (little carry bags for the takeout lifestyle) or “healthier” (fewer calories).

Where companies cannot change sizes — as in clothing or appliances — they have warned that prices will be going up, as the costs of cotton, energy, grain and other raw materials are rising.

“Consumers are generally more sensitive to changes in prices than to changes in quantity,” John T. Gourville, a marketing professor at Harvard Business School.......

Continue at:
http://www.cnbc.com/id/42315625
  1. groups:
    Community,   Greatest Depression,   Business News & Analysis,   Finance & Economics,   2 more
  2. tags:
    Food,  Inflation,  rising prices
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6 comments // Food Inflation Kept Hidden in Smaller Bags

  • nanac
    • +3
      nanac  

    • Corporations started down-sizing food and other products during the Regan era..They reduced the size, and amount of contents in their products while simultaneously raising prices. The quality of products and services is also disappearing..

    • 1 year ago
  • Schnookums
    • +3
      Schnookums  
    • nanac:

      I personally think declining food quality is the principle driver for food inflation. As a result, most people only shop the outside isles to supplement their inside isle purchases.....and not the other way around as it should be.

    • 1 year ago
  • nanac
    • +1
      nanac  
    • Schnookums:

      I try to get the most for my money, both quality and quantity.I shop through out a store..Quality is likely to be one of the factors that is causing food inflation, however I would think that greed is the primary factor..

    • 1 year ago
  • artemis6
  • nanac
  • Schnookums
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