Inflation Is Cooling. Shrinkflation? It’s Alive and Well.

Just a few years ago, a five-pack of snack-sized candy bars cost $1 at a Brooklyn dollar store. As inflation heated up, that rose to $1.25. 

That price is still in place—but the Heath bars come in a four-pack now. 

Hershey’s (HSY), maker of Heath, York peppermint patties, Reese’s, Kit Kat and other candies, is hardly the only company curbing how many goodies you get for your dollar. “Shrinkflation”—in short, when companies shrink the volume in a package, but charge the same amount for it—continues to spread through stores, experts say. 

Inflation has moderated, according to recent data, rising less dramatically than seen during the highs of the pandemic, though some experts think tariffs could inflame it again. Meanwhile, according to Finn Hansen, CEO of London-based price consultancy PriceBeam, companies are having a harder time justifying price increases by saying they’re paying more for supplies and merchandise—and so they’re tweaking proportion instead of price, which can be less obvious to shoppers.

“If your favorite brand is going up in price, you notice,” Hansen said. But if a package that once held 5.5 ounces now holds 5, he added, “you may or may not notice.”

Shrinkflation Gripes Abound as the Practice Spreads

Shrinkflation hit a recent peak in June 2024, according to a log of how often consumer-price index researchers noticed “downsized” packages. Although they’ve found fewer examples in recent months, the CPI team’s observations also show that the number of “upsized” products has fallen off since 2019. 

Shrinkflation became a hot topic during the pandemic, when inflation soared and rising prices were top of mind. Articles published in 2022 documented tissue boxes with fewer tissues, shampoo bottles with less shampoo, and bags of chips that held fewer chips. Merriam-Webster added “shrinkflation” to its dictionary that year; lawmakers drafted legislation targeting the practice, while late-night comedy hosts weighed in on it.

The phenomena continues to irk consumers, including the thousands documenting suspected downsizing on Reddit’s Shrinkflation forum, which is filled with side-by-side comparisons of old and new packages, photos of products on kitchen scales and debates about the impetus for recipe changes.

“Me hate shrinkflation! Me cookies are getting smaller,” the puppet known as Cookie Monster wrote on X in 2024. “Guess me going to have to eat double da cookies!”

Price Pack Architecture Enters the Convo

Companies know downsizing has its downsides, publicity-wise. 

It’s not a word executives use much, according to a review of earnings conference calls. They have, however, been talking frequently about changing products’ “price pack architecture.” That term can cover downsizing, but also other changes, such as reshaped bags, boxes, cans and bottles and completely new product sizes.

“One of the benefits of price pack architecture… is it’s not a direct price point increase, but rather it’s kind of a combination of sizing and price, which can tend to offer perhaps a better value perception for consumers,” Hershey CEO Michele Buck said during a May conference call, according to a transcript made available by AlphaSense. Hershey didn’t respond to Investopedia’s requests for comment. 

Sara Lee launched a 12-slice “half loaf” of bread this spring. “We understand that many customers in smaller households want to enjoy fresh, delicious bread without worrying about the waste,” the brand said in a press release. “With our new Half Loaves, we’re delivering just that.”

Some Shifts Aren’t All About Money

Companies have several reasons to introduce smaller pack sizes that are unrelated to driving up the price per unit, retail experts said. 

Some shoppers prefer compact cases of cookies, chips and other “guilty pleasures” to help with portion control, said Ellen Kan, partner at consulting firm Simon-Kucher; this may appeal in particular to those on GLP-1 appetite suppressants, she said. To-go sizes and individually wrapped portions are popular in busy households and with younger consumers trying to avoid waste, said Lauren Beitelspacher, professor of marketing at Babson College. 

Companies also believe that selling smaller packages at lower overall prices—even if they cost more per unit—can help keep products feeling affordable to those on a budget, experts said. And they can offer a less-expensive entry point for people curious about new flavors.  

Executives are thinking “how can I preserve affordability in the portfolio even as inflation has continued to accelerate?” Kan said, calling this “a driving factor” in the surge in smaller pack sizes.

Still, some of the larger consumer-packaged goods companies may have exhausted their ability to simply raise prices, whether through traditional price hikes or by shrinking packages, Hansen said.

Companies are reluctant to tell investors “’Well, we didn’t meet our volume expectation; we didn’t meet our general sales expectation, but we managed to push price, so therefore, we are still saving the bottom line,’” Hansen said. “They’re a bit worried.”