Shrinkflation and price dripping

Anyone old enough to remember previous eras of inflation will be familiar with the "shrinkflation" of products:

From toilet paper to yogurt and coffee to corn chips, manufacturers are quietly shrinking package sizes without lowering prices. It's dubbed "shrinkflation," and it's accelerating worldwide.

In the U.S., a small box of Kleenex now has 60 tissues; a few months ago, it had 65. Chobani Flips yogurts have shrunk from 5.3 ounces to 4.5 ounces. In the U.K., Nestle slimmed down its Nescafe Azera Americano coffee tins from 100 grams to 90 grams. In India, a bar of Vim dish soap has shrunk from 155 grams to 135 grams...

Dworsky began noticing smaller boxes in the cereal aisle last fall, and shrinkflation has ballooned from there. He can cite dozens of examples, from Cottonelle Ultra Clean Care toilet paper, which has shrunk from 340 sheets per roll to 312, to Folgers coffee, which downsized its 51-ounce container to 43.5 ounces but still says it will make up to 400 cups. (Folgers says it's using a new technology that results in lighter-weight beans.)

Dworsky said shrinkflation appeals to manufacturers because they know customers will notice price increases but won't keep track of net weights or small details, like the number of sheets on a roll of toilet paper. Companies can also employ tricks to draw attention away from downsizing, like marking smaller packages with bright new labels that draw shoppers' eyes.

That's what Fritos did. Bags of Fritos Scoops marked "Party Size" used to be 18 ounces; some are still on sale at a grocery chain in Texas. But almost every other big chain is now advertising "Party Size" Fritos Scoops that are 15.5 ounces — and more expensive.

In the service economy, the counterpart is "price dripping" (or "drip pricing"):

Welcome to the hidden-cost economy, where sneaky fees are lurking everywhere, whether you’re buying concert tickets or plunking down your credit card at a bar, making everything much more expensive than they initially appear. It’s a retail strategy known as “price dripping.” Brands reel buyers in with a misleadingly low headline price before “dripping” an extra charge on top during the purchasing process...

Restaurants are adding “kitchen appreciation” fees, and both airlines and Uber began implementing fuel charges as oil prices skyrocket.

 

“Inflation has made the costs of raw materials more expensive,” Ching says. “But businesses are worried that if they raise the retail prices, that would upset consumers. Drip pricing is a ‘hidden’ way to raise prices.”... hidden costs that, in some cases, add up to more than the original price of the service or good... screenshot of an Airbnb charge that included $307.17 in cleaning, service, and occupancy fees—more than the $189 it costs to stay in the vacation rental for a single night.

The story continues at Fortune.