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Question of the Day – Inflation
By JLP | April 14, 2008
Here’s today’s question of the day:
In my opinion, price increases through size reductions are sneaky. I hate them. I would rather manufacturers shoot straight with me and increase the price of the product rather than leave the price the same but reduce the amount of product.
A couple of years ago, nearly every ice cream maker reduced the size of their containers from 64 oz. to 56 oz. If the price stayed the same, this would reflect a price increase of over 14%! I bet lots of people didn’t even notice the difference. Blue Bell left the size their container at 64 oz. and slapped “still 1/2 gallon” on the side of each container to try to take advantage of their competitor’s sneakiness. The problem is that now the regular price of a 1/2 gallon of Blue Bell is now over $6!
Needlesstosay, we buy A LOT less ice cream than we used to.
Related: Food Costs Rising Fastest in 17 Years
Topics: Question of the Day | 10 Comments »
April 14th, 2008 at 11:57 am
I agree with you…I’d rather see the direct price increase. Rising prices have already put certain ‘normal’ items (i.e. ice cream) on the back burner for me. Besides, I admire those companies who are honest vs. any one of their competitors…regardless of their prices.
April 14th, 2008 at 1:11 pm
Re: food, in today’s culture, I think I’d much rather see size reductions. Our portions are already too large and perhaps smaller packaging will indirectly promote eating less.
April 14th, 2008 at 1:37 pm
There are so many substitution goods that increasing prices may reduce overall profits for that product. Instead, it may be better (and healthier) for package size reduction. I won’t get into the psychological effect of eating from a big bowl vs. a small bowl (or the one where people can’t tell the difference), but the way that most people eat, they can afford to eat a little less
April 14th, 2008 at 1:55 pm
Since we’re only a family of three, i would rather see the size reduction–we can’t finish a 1/2 gallon of ice cream in a month! I don’t consider it very “sneaky”, since i purchase based off “price per size” (e.g. weight), not “price per item”.
April 14th, 2008 at 2:06 pm
I’ve seen the same thing in Yogurt over the past year, but I’ve noticed companies portraying it as “healthier” while quietly reducing the size. I think those new “eco-friendly” water bottles are the same. They market them as using less plastic, so they’re better for the environment and they shape it to “fit your hand more naturally” but the overall volume has also gone down… I think it’s just another dishonest item on the list of marketing used by food producers and packagers.
April 14th, 2008 at 2:51 pm
I’d rather see a direct price decrease AND a portion size decrease. Not directly related to groceries, but going out to eat is ridiculous. My wife and I can easily stuff ourselves on the portions for one person these days.
April 14th, 2008 at 5:03 pm
I would rather that they kept the price the same, kept the size the same, but just reduced the calories. Calories must cost something? They don’t just fall out of the sky.
April 14th, 2008 at 5:13 pm
I’d rather see higher prices than manipulative creative marketing.
April 14th, 2008 at 10:16 pm
As a consumer, I am indifferent between smaller sizes or higher prices (assuming that the per unit cost of the changes are the same).
As an economist, I’d rather see price increases. By changing sizes, companies incur a “menu cost” because they have to manufacture new packaging, reprogram assembly lines, etc. This is an additional cost that no doubt gets passed onto consumers.
I find it interesting, though, that people comment on portion sizes. I bet a large number of those who prefer more “appropriate” portion sizes buy plenty of other things in bulk.
April 15th, 2008 at 9:05 am
Even without inflation, I’d prefer to see smaller more expensive packages of junk food.