Tuesday, October 7, 2008

Another Sign of Inflation: Package Shrinkage Hits Dollar Stores

A recent visit to my friendly neighborhood dollar store, one of the Dollar Tree chain, left me with an alarming sign of yet more inflation in our grocery stores. While I only nailed three items that had clearly shrunk their packaging, it was enough to make more vigilant about size changes.

The first item was an ordinary family pack of white table napkins. My prior purchase of Soft & Silky single-ply napkins held 180. The new pack holds 160. Readers may say, big hairy deal, this is only 20 napkins less. But this is a reduction of 12 percent.

The other item was Awesome Oxygen, the laundry detergent enhancer and stain remover. The old plastic tub held 16 ounces; the new tub held only 12 ounces. To put it another way, the package has shrunk by a whole 25 percent.

A third item is the multi-pack of chewing gum. No matter what the Wrigley brand -- Spearmint or Juicy Fruit or Extra -- where the strip once held five 5-stick packages of gum, they now hold just four packages. In other words, the multi-pack has shrunk from 25 total sticks to 20 sticks. This is a shrinkage of 20 percent.

The first time I purchased a four-unit package, nearly a month ago, I failed to recognize the shrinkage. I just scratched my head thinking I had already absentmindedly used a pack. But about a week ago when I bought a couple more packs, I made sure to notice how many were really in there. Wow, snookered again by the product-shrinking gremlin.

Conversation with the store manager produced nothing but a disavowal of any control over package sizing. I did not expect much from the manager, other than an apology for any inconvenience.

All of us on the receiving end of corporate decisions always feel so helpless to do anything other than cough up the price increases and package shrinkages. One can always stock up on other brands or older packages to cushion oneself against the inevitable for as long as possible. With luck, one can even get through the winter without actually shelling out for higher prices/smaller packages.

This brings up the true story of the coffee maven, from the book Tipping Point. This person was a bit of a fanatic about following coffee prices. He noticed a news item that Brazil had suffered a severe frost in the coffee-farming regions (this was several years ago). He figured that it was a matter of time before price increases would hit the consumer market, so he began buying up coffee on sales, with coupons, etc. at ridiculously low prices. He probably wound up with a year’s supply while other consumers where bellyaching about the sudden price surge.
In a similar way, shoppers might be able to find larger packs still on the shelves at smaller stores where inventory does not turn over as quickly. The dollar store may still have a better deal than the drugstore, grocery, or hardware store, so make a careful note of sizes and whether the product actually does the job for you.

Good luck.