Warning: Watch Out for This Retailer Pricing Trick

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The next time you’re shopping at the grocery store, money expert Clark Howard wants you to be aware of a pricing trick many retailers use: “shrinkflation.”

Like its close cousin inflation, shrinkflation steadily decreases the quantity of goods you can get for your hard-earned money.

Coming to a Store Shelf Near You: ‘Shrinkflation’

“‘Shrinkflation’ is a key phrase that’s being used right now to describe what packaged goods makers are doing in retail stores and supermarkets,” Clark says. “They typically keep the package the same size, but they reduce the amount of contents in the package.” 

In this article, I’ll show you how to counteract this shady pricing tactic with some tips from Clark. But first you may be wondering: What does shrinkflation actually mean for your wallet?

“It means that you’re paying what you think is the same price, but then you open the bag of chips or whatever, and gosh it sure doesn’t seem like there’s a lot there,” Clark says. “This really is going on!”

bag of potato chips
Photo credit: Dreamstime

For example, a tube of toothpaste that once contained 7.2 ounces may have only 5 ounces in it now. Clark says he’s also seen Hot Tamales candy, which originally had 6 ounces in a box, go to 5.5 ounces and then down to 5.0!

So what do you do?

3 Ways To Save When You Shop for Groceries

Clark says it’s important that you pivot from the way you normally shop and use strategies that let you keep more money in your wallet. Here are his three shopping tips.

1. Check the Unit Pricing

As you look at the price tag on a particular item, make sure you also check the unit price, because unit pricing gives you a better indication of the quantity of goods you’re getting compared to the price.

You can calculate the unit price of an item using the following formula: Retail price divided by size.

For example, if a 17-ounce item costs $5.39, the unit price would be — (5.39 divided by 17) — 31.71 cents per ounce. 

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 “Unit pricing is your friend to combat shrinkflation,” Clark says. 

Learn more about unit pricing.

2. Look at Store Brands

Clark says customers and retailers share the same incentive when it comes to store-brand items: “That’s where your interests and that of the retailer or supermarket align perfectly. They want you to buy the store brand instead of the nationally advertised brand.”

Clark says the benefits of buying store brand merchandise are a win-win for the customer and retailer.

“They make a higher margin on the store brand and you get a lot more product of something that today, unless the retailer’s dumb, the quality is going to be as good or better than the nationally advertised brand.”

The store brand is often cheaper as well. For example, as of this writing, a 40-ounce jar of Jif creamy peanut butter is $5.99 at Target. The store-brand equivalent is $3.29.

3. Watch Out for ‘New and Improved’

Clark says shoppers need to be on guard against marketing language that could entice them to spend needlessly. When you see something that says “new and improved,” Clark says you should “watch it very closely.”

“‘New and improved’ is a standard marketers tool anytime a company’s trying to push through a price increase,” he says. “They’ll say ‘new and improved,’ and what it means is that it’s a new package with less product or higher price. Very seldom is it actually something different. Don’t get conned by that.”

Final Thoughts

Clark says being proactive about the things you buy is a great way to take charge of your financial life.

As for inflation and “shrinkflation,” Clark says, “I do want you to hold out hope that the pricing problems we’ve been having in a lot of categories are temporary effects from the pandemic.”

Want to know how to buy food for less? Here’s how to save on groceries.

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More Savings Resources From Clark.com:



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