August 11, 2008

Price May Be the Same, but Check the Contents At Supermarkets, Packages Are Shrinking

By M.P. Dunleavey

Imagine what would happen if the price of gasoline remained the same, but instead of selling it by the gallon, gasoline service stations knocked down the size a few ounces.

It might seem that you were paying the same amount but you wouldn't be. You would be getting, say, a mere 120 ounces instead of 128 for every gallon, so you would be paying more for the fuel.

If stations labeled the change clearly, would there be riots in the street? Would weary consumers simply shrug and pay the same for less at the pump?

We don't really know how people would react. But something very much like this is already occurring at supermarkets in the United States, what Tod Marks, a senior editor at Consumer Reports, calls "the incredibly shrinking package" strategy.

The repackaging trick isn't new. Who hasn't opened a box of cereal or a bag of chips and marveled at the abundance of air with the food? But Marks, who tracks the grocery industry, said, "It's definitely happening a lot more than it used to."

According to a study conducted this summer by the Consumer Reports National Research Center, shrinkage is occurring across a broad spectrum of goods, Marks said. The study will be published in the October issue of Consumer Reports.

Some of the worst offenders are canned tuna, paper towels, chewing gum, butter-type spreads, candy bars and, perhaps most drastically, coffee and ice cream.

In many cases, he said, the traditional one-pound, or 16-ounce, can of coffee has dwindled to 10 ounces or 11 ounces. And many ice cream containers have shrunk from a half-gallon to one and a half quarts, or half a quart less than a half-gallon.

Having just bought what I thought was a half-gallon of ice cream, I checked my freezer and was taken aback when I read the label. No 64 ounces here, just a mere 48 ounces dolled up to look like a half- gallon.

I felt snookered, but it was my own fault. I had not checked the container's actual size or the unit-pricing label, which are among the steps that Marks says are essential if you are going to get your money's worth in groceries these days.

Also, he advises, look sideways at a package before you buy it.

"Companies won't change the height or length of a container. It's the width," he said. "The Hershey's bar you pick up at the register looks like the old 3-ounce bar but it's only 1.5 ounces. Hold it up. It's as thin as a wafer."

The incredible shrinking package game is hardly amusing when one contemplates a rapidly expanding grocery bill. But, in a funny way, it may be a good idea for food manufacturers and shoppers alike, said Harry Balzer, a vice president of the NPD Group, a marketing research firm based in Port Washington, New York.

With the soaring cost of wheat, corn, eggs, milk and other staples, grocery producers are faced with a dilemma, said Balzer, who studies food consumption. "People hate paying more for groceries," he said. "How do manufacturers deal with rising food costs without passing it along directly to the consumer?

"One option that you're seeing: they keep the price the same but lower the amount. In effect, it's a price increase, but it's not an increase in out-of-pocket expenses," he said.

Actually, I pointed out to Balzer, it is certainly an increase in what I pay out of pocket if my half-gallon of ice cream lasts only 1.5 quarts' worth of servings or my box of cereal runs out after a week instead of two.

Balzer agreed. "There's no question that you're paying more for food," he said. But, he added, consider the challenge facing food producers. "They have to make a decision: Do you raise the price of a product and risk that customers may not buy it, or do you modify the packaging and risk that people might feel deceived?"

As flawed as the system sounds, Marks, of Consumer Reports, says he believes that the grocery dance keeps everyone happy, more or less. "In effect, grocery manufacturers are still raising prices, yet people are paying the same - which is somehow appealing to the American psyche."

Originally published by The New York Times Media Group.

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