Shrinkflation is a lie: how companies used inflation as cover
Ever notice your chip bag feels lighter but somehow still costs the same? Tyler's had it with companies calling that inflation when it's really just shrinking the product, keeping the price, and quietly banking record profits. This episode walks through real examples from Doritos to Gatorade to General Mills, breaks down corporate profit margins and the growing gap between CEO pay and everyone else's paycheck, and looks at the bills in Congress that could have addressed it and died without so much as a hearing. It's less a tidy explainer and more an argument for calling shrinkflation and greedflation what they actually are, and a reminder that your gut feeling about that lighter bag isn't you being petty. It's a straight shot to the heart of consumer rights and who actually gets a say in what you pay for.
They shrink the product, they hike the price, banked record profits and told you it was about inflation. Now this episode is about calling it what it actually is. Now, usually on this show, I like to have a good time. I like getting nostalgic, digging up some good old day kind of things. And when I say good old days, I'm talking about like 2005, you know, whatever, some hazy stretch of use to be better. That's usually where I like to go. Not today today. I'm angry and I want to tell you why Quick question for you though When did you last stand in the cereal aisle at the grocery store and actually
feel that box not read it feel it Because I want you to think about how light it felt in your hand and how you probably told yourself, huh? Prices are just crazy right now. It moved on with your day. I'm not mocking you. I've been doing the same thing for like two years straight and I'm bout over it. My name is Tyler. Thanks for being here today. I'm talking about shrinkflation or as the economic people like to coin this new term greedflation. Two ugly words economics has given us. Thank you for that I guess. And, you
know, about why calling any of this just inflation lets a whole lot of rich people off the hook. And I don't like letting the rich bastards off the hook. So, before I get any further, because I'm worked up on this one, opinions are mine, nobody else's. All of this is from my point of view. Now, here's my confession before we get any further. I am, by nature, I'm a guy who doesn't like confrontation. especially You know confrontation about money. I'll notice that bag feels lighter and I'm still gonna buy the bag every time I've bought the smaller Doritos bag at the same price a dozen times without You know saying award to
anybody not my wife not my friends not the rest of my family And you know why? Because it it felt you know petty To complain about a bag of chips I'm here to tell you it's not petty because that's the whole con They're betting on you feeling like it is petty So, you know, let's lay out what actually happened Because this part isn't opinion. This is documented. This is happening Doritos You know Doritos? They went from nine
and three quarter ounces to nine and a quarter ounce. Same price. That's about like five fewer chips a bag. And when a reporter asked PepsiCo about it, their spokesperson said, quote, we took a little bit out of the bag so we could give you the same price and you keep enjoying your chips. Like it's some kind of gift like shrinking the bag was a few was some kind of favor. Oh Thanks Doritos Give me my five chips back Now Gatorade they did the same thing 32 ounces down to 28 and they didn't hide it did
these guys didn't even try to hide it They redesigned the damn bottle to look some sort of I don't know Aerodynamics, so you wouldn't clock that you're paying the same amount of money for 4 fewer ounces. General Mills. You know, the cereal company. The family size box. 19 .3 ounces down to 18 .1. No price change. When NPR asked about it, they said it was about reducing emissions. When they talked to their own investors, they called it And I'm not making this phrase up. I don't know what kind of buzzword soup this crap came from but it's they called it price pack architecture look it up different rooms
different words the same thing shrink flation greed flation and shitification of physical products whatever you want to call it They pitch one thing differently to the investors versus what they tell the news Because they don't want you to know And here's the one that actually this is what got me going this is why I'm so worked up today because I had to record this episode when I read this one I was like all right. We're doing an episode on this Kimberly Clark If you don't know that name they basically make a lot of toilet paper and other Products out there. I'm not gonna go through the list, but their CEO Was talking
about raising prices on toilet paper said out loud on the record quote if the price goes up on bad tissue Generally that doesn't mean you're going to use the bathroom less right That's the thinking you need this you're not gonna go anywhere They're gonna squeeze away Now the other part they don't want strung together with those shrinking bags While all of this was happening corporate profits. They weren't just fine They were record -breaking The groundwork collaborative went through the actual federal data and found corporate profits
drove 53 percent of inflation in the back half of 2023 53 percent now compared that to the 40 years before the pandemic where profits historically explained about 11 percent of inflation that's not a small shift that's a different game entirely I don't even care to imagine where it's gone since 2023 up to now 2026. I'm sure it hasn't gotten any better. Think about it though. Fourth
quarter of 2023, corporate profits hit $2 .8 trillion with a T. $2 .8 trillion. A record. The FTC did their own investigation into grocery pricing and found that retailer profit margins hit 7 % over cost in 2023, above even the previous peak. Their own chair said dominant firms Use this moment to come out ahead at the expense
of the people they serve You and me That's the FTC saying that not some guy on a podcast. That's the FTC's own wording Meanwhile think about your paycheck Real wages were down 25 straight months Now, as you can imagine, CEO pay in that same stretch hit 290 times what a typical worker makes. In 1965, that ratio was 21 to 1. 21 to 1 used
to be considered generous. So no. This was not inflation happening to companies the same as it was happening to you this was some companies using inflation as a cover as an excuse and a Lot of that extra money went straight to the top not sideways to cover those higher cost Now if that first ten minutes of this didn't you make didn't bug you This this will probably get your blood boiling a little bit And I want to say this slow because I want it to be heard I
want it to land There were bills Actual bills in Congress One of them called the shrink flation prevention act would have made the FTC treat this shrink and hide game as a deceptive practice. The Price -Galging Prevention Act, the other one, would have gone after exactly what the FTC's own report described. Guess what happened? No, go ahead, guess. Both of them died. They weren't voted down, died, set in a committee, never even got a hearing, never got a vote, while The food
and beverage industry spent close to 30 million dollars in a single year Lobbying the same people who were supposed to be writing the rules Now I want to be fair here because I really do try to be Not every Economist agrees on how much of this is pure greed versus real Cost catching up late in the game or whatever the San Francisco Fed pushed back on the greed -flation framing. Some of this is genuinely complicated, but even the researchers who are skeptical don't dispute the markup spikes in the, you know, certain specific
sectors in that prices stayed high long after the cost that supposedly caused them came back down. Now nobody's disputing that part nobody So a few things I keep coming back to where I land one Let's be real Stop calling it inflation in your head because The word does a lot of work letting everybody off the hook Inflation is what happens to everybody equally Now what happened here? is some companies raised prices faster than cost, ranked the product on top of it, and
kept the difference. They gained you. They're pocketing that extra money. We need to call it what it is. When you talk about it, words matter here. More than people think. All right, another one. The people who could have done something about it mostly didn't Not because they lacked the spine or the Cajones or the tools The FTC wrote the report Congress had the bills It just
didn't happen And there's a lot of lobbying money and more than a few members of Congress trading stock in these same industries sitting right there in the middle of that story. Something like 86 % of Americans across party lines. We don't agree on much anymore, but we agreed on this. Think Congress shouldn't be allowed to trade stock in industries that they regulate. 86 % Now that's about as close to some sort of universal agreement as this country gets on anything and it still hasn't happened Last one I promise
last one and this is one that actually That's actually about you and me Not the economy You're allowed to be loud about this. You're allowed to post the receipt. You're allowed to email whoever represents you and say, I know what you did and what you didn't do here. You're allowed to stop feeling embarrassed about noticing the bag is lighter. That instinct, I mean they're counting on. The one where you think it's beneath you to complain about a bag of chips That instinct
that's what they're counting on that you won't complain that you won't raise a stink about this that you won't call your representatives that you won't go online and post the receipts That's what they're selling you along with that smaller bag Stop buying that part I I don't got a neat little bow to put on this one I'm I'm not gonna give you three easy tips to somehow beat corporate greed Mainly because well there aren't three easy tips But I am telling you You know what
I'm telling you is uh well basically Your anger It's correct what you're feeling that's correct. You're not being dramatic about it You're not being petty about it. I Think a lot more people should speak up You did the math you know what's going on Even if it just even if you're trying to Tell yourself, you know, maybe I'm imagining this That instinct that gut feeling that something is wrong Listen to it And that's the show If
you want to keep up with it subscribe wherever you're listening if that's YouTube Apple podcast Spotify You can find everything else that Tyler Woodward dot me And if you want to buy me a cup of coffee Don't really know how to end it. I don't have a clean little sign off and today I'm I just kind of want to leave it messy because Well, the thing that I'm pissed off about is I guess a little messy too, so That seems fitting, right? So I'll catch you guys next week
