Description: Watch out for “shrinkflation,” that practice of producers shrinking package sizes to compensate for increasing costs. Instead of passing on the increasing costs to the end consumers, these companies shrink the box size. Shrinking packaging causes consumers, like Ellyn Newall of Edmonton, to feel duped. After getting her grocery order home, Ellyn realized Post’s Honeycomb had produced a new taller box that actually had less volume of the tasty cereal than the old one. It is doubtful that Newall is the only Canadian to feel let down by this packaging practice.
Date: October 18, 2023
1) Have you and your classmates encountered any “shrinkflation?” in your grocery shopping?
2) Do you think the government needs to intervene regarding the practices of producers in shrinking package sizes rather than simply raising prices to cover increased costs?
3) Appendix B of Wiley’s Financial Accounting: Tools for Business Decision-Making shows us the financial statements of Sobeys, a major Canadian grocery chain. Chapter Five opens with a vignette discussing Loblaws, a major rival of Sobeys. Do you think one of these grocery chains could gain a strategic advantage over the other by insisting that its suppliers take action on shrinkflation?