28 May 2010

Sneaky Price Inflation Suppression

Inflation 8 Comments

A while ago I got this email from Connie Cline, who makes a point about hidden CPI inflation that Silas Barta has been promoting:

I had a rather mundane experience the other day, but it got me wondering … I was at my favorite big box store picking up landscape staples (you know, those little u-shaped wires for securing weed mat) and picked up the usual package. I did a double take because it didn’t feel right when I picked it up. The package was the same as always and so was the price, so I paid and brought it home. When I opened the package I compared a staple to one I had bought a few months ago and sure enough the wire was maybe half or a third as thick as the old wire. Then I remembered that at one point I noticed that my toilet paper rolls — same brand I’ve always bought at the same warehouse store — suddenly were narrower. In neither case was there a snappy little yellow star say “Look! Now lighter weight! Better for the environment!” or anything. Same package, less stuff. So I was wondering, is this sort of thing ever accounted for when people are calculating whether prices are rising?

8 Responses to “Sneaky Price Inflation Suppression”

  1. Tom Long says:

    FiberOne bars are about half the size they used to be, always makes me mad.

  2. Yancey Ward says:

    I actually have two recent examples myself. I like mini chocolate donuts with my mid morning coffee, and I buy what used to be a package of 20. Now, I eat them 4 at a time which means a bag lasts 5 days. I noticed about 3 months ago that on day 5, I had only 3 donuts. At first, I thought I had probabably accidentally eaten 5 one morning instead of 4. However, the same thing happened on the next bag, and the next. After the third time, I actually opened a new bag and counted the donuts- there were 19 in a bag that claimed to have 20. They lost a customer for good after that.

    My second example involves pepperoni. I make my own pizzas, and I usually buy a double stick of pepperoni that I slice. I noticed just today that the sticks are about 2 inches shorter than they had been. At first, I thought I was looking at a different brand or a different size than normal, but it was the same brand at the same $3.39 price. I am going to pay more attention to this going forward.

  3. Taylor says:


  4. redbud says:

    Folks, that is marketing 101. Been happening forever. Then when sizes come back, they brag about the increase in size. (*Kind of like folks bragging how much things are improving in %, while nominal numbers stink*) Frito did this last year. Shrank the bags, then restored them with a big label “20% more!”

    The most obvious long-term example is a moon pie. Used to be 5″ across. Now the size of an oreo. Nothing new, move along.

  5. Jeremy says:

    You don’t have to do all this fancy cross checking of sizes and quantities. Just look at the unit price ($/oz etc) and you can see quite clearly prices are rising.

  6. Dan says:

    Yup, I’m with redbud on this one, it has been happening forever, but mainly in the degree of an economic downturn. Every company is looking for ways to cut back on costs either by making things smaller, lighter or for that matter heavier, as long as its cheaper in price. Car parts for example, used to be made at an incredible long lasting quality every time, now there’s recalls every year or every half year on one product or another (Toyota). Products start getting produced cheaper and negative effects come of it, even in the case of your candy bars, haaa….

  7. Robert Weiler says:

    A quick google search for ‘CPI product size’ will find this as the third result :http://www.bls.gov/cpi/cpifaq.htm where it is explained that the CPI does indeed take product size and quality into account. Some things, like candy bars may go up, but other things, like computer CPU’s continue to go down in price. Housing, of course, has gotten dramatically cheaper in many parts of the country, and for most people, that is their primary expense.