Written by: Nichole Huff, Ph.D, CFLE
With the inflation rate sitting at 3.4% as we enter 2024, the price of most goods and services remains high. This is especially true for groceries. The USDA Food Price Outlook reports food prices rose 5.7% from 2022 to 2023, year-to-date average, with some of the largest Consumer Price Index increases seen in processed foods: processed foods and vegetables (8%), cereals and bakery products (8.4%), sugar and sweets (8.5%), and nonalcoholic beverages (7%).
One way to combat food inflation is to shop smarter when buying groceries. Consider ways to eat healthy on a budget (foregoing some of those overpriced processed foods) and recognize pricing tactics like “shrinkflation.”
Understanding Shrinkflation
Shrinkflation occurs when companies maintain current prices (or even slightly raise prices) while giving you less product. The size difference is often small enough to keep the physical packaging the same. Examples might be a package of bacon shrinking from 16 ounces to 12 ounces, or a bottle of juice shrinking from 32 to 28 ounces. Small changes, like four-ounce reductions, go largely unnoticed by consumers. However, shrinkflation can impact the overall price of your grocery bill and how frequently you need to repurchase a shrinking product.
Calculating Unit Price
One way to combat shrinkflation is to calculate and compare unit prices. Unit prices allow you to compare different brands and different sizes of the same brand. Unit prices show you the price per unit, such as pounds or ounces, and are located on the shelf price tag, not on individual packages. To calculate the unit price of an item, divide its price by its number of units. For example, a bottle of juice that costs $2.50 and contains 28 ounces, has a unit price of $.09 per ounce. The U.S. Department of Agriculture offers tips for calculating unit prices, as well as buying budget-friendly, healthy options when grocery shopping.
Passing On Processed Foods
Processed foods can be appealing – they are typically tasty, convenient, or both tasty and convenient. But they also come at a price (figuratively to our health, and literally to our budgets). Practice smart shopping strategies like couponing, buying generic brands, and using customer loyalty programs to save at the grocery store. Whole foods (i.e., How closely does a food resemble its original form?) will often be cheaper and provide more mileage for the cost. For example, a $5, 5-pound bag of potatoes could be prepared in a variety of ways (e.g., baked, roasted, mashed, air fried, diced for soups), yielding numerous servings over several days. For additional tips on shopping smart, including utilizing commissary and exchange benefits, visit https://finred.usalearning.gov/Trending/Blog/BecomeSmartShopper.
Reference:
Huff, N. (2023, March). Shrinkflation: Increasing Prices, Decreasing Quantity. In MONEYWI$E: Valuing People. Valuing Money. University of Kentucky: Family & Consumer Sciences Extension.
Photo credit: Dzmitry on Adobe Stock
