I've been surprised at how little the official Consumer Price Index has risen since the onset of the tariffs. Part of this may be the result of companies eating some of the costs, but a more subtle effect is "shrinkflation" - a process that has been going on for decades as companies downside the size of products while holding the sticker price unchanged. Anyone who pays attention to their budget and shopping is aware of the process; hat this is accelerating is evidenced in this article in Reuters:
Toy makers that serve retail giants like Walmart, Target and Amazon are reducing the number of accessories in toy kitchen sets, removing batteries from electronic playsets, simplifying doll makeup and reducing packaging, as a 30% blanket tariff currently imposed on Chinese imports puts a damper on their bottom lines...Educational toy maker Popular Playthings - whose China-made animal sets, trucks, and magnetic food sets can be bought on Amazon - is delaying and paring down a magnetic cake set it had planned to launch in June, CEO Jason Cheung said in an interview. The company is reducing the power of the magnet, using cheaper packaging, and removing one of two serving plates that were to come with the set -- all while upping the price from $29.99 to $34.99."Originally it would come with two plates so two kids can have cake at the same time,” Cheung said. Now, "one (child) will serve, while the other can eat."
Time to cue Led Zeppelin "Tea For One."
As the number of historically non-partisan government organizations dwindles, when do we stop trusting numbers from the Bureau of Labor Statistics?
ReplyDeleteI've been worried about the same thing, smittypap, with regard to both the unemployment data and the inflation data.
DeleteThis explains a lot. Yogurt containers, cereal boxes, etc.
ReplyDeletehttps://tywkiwdbi.blogspot.com/2022/06/shrinkflation-and-price-dripping.html
ReplyDeleteI just opened a box of Zesta Saltines and laughed. There was 3 inches of box before the wrapped crackers.
ReplyDelete