New Groundwork Report Exposes Shrinkflation’s Role in Rising Prices

March 6, 2024

New Groundwork Report Exposes Shrinkflation’s Role in Rising Prices

Shrinkflation responsible for as much as 10% of inflation in key product categories; Biden expected to address shrinkflation at SOTU

Today, Groundwork Collaborative released a new report, “Big Profits in Small Packages,” that dives into the strategies corporations are using to boost profits, specifically, making their product sizes smaller while maintaining the same – or higher – prices. The report makes clear that “shrinkflation,” also known as “price pack architecture,” is playing a crucial role in growing profit margins while shortchanging consumers, with executives citing outrageous gimmicks like portion control and reducing emissions as excuses for ripping off consumers.

President Biden is expected to address shrinkflation in his State of the Union speech on Thursday, March 7. On Tuesday, President Biden announced a new “strike force” to address illegal and unfair pricing.

“​​During this period of high inflation, where rising prices are putting a squeeze on household budgets, shrinkflation just adds insult to injury,” writes Lindsay Owens, executive director of Groundwork Collaborative and author of the report.

The report notes steps the Biden Administration has already taken to rein in deceptive pricing practices and also offers policy recommendations to further crack down on unfair profiteering, such as empowering the FTC with the Shrinkflation Prevention Act introduced by Sen. Bob Casey (D-PA). The report also recommends strengthening the corporate tax code to disincentivize egregious profiteering.

Among the report’s key findings:

The report comes as policymakers scrutinize shrinkflation and corporate pricing strategies. President Biden released an ad before the Super Bowl condemning corporations that have shrunk the size of their products and new legislation from Sen. Casey specifically targets shrinkflation.

Read the full report here and email to speak with Lindsay Owens about the report’s findings.