You’ll have to pardon me as I use this post as a bit of a rant. My rant has to do with something I call silent inflation. Basically, this means that inflation is happening, but in the background. Not up front and out loud. Marketers are making good use of one of the oldest tricks in the book which is charging the same price for less product. I for one am really annoyed by this and would prefer that they just increase the prices a little bit and leave our package/serving/product sizes alone.
It is understood and accepted by all that inflation is upon us. Always has been and always will be. So why try to hide it? Yeah, it’s a marketing ploy that works. But for many products which are daily necessities, people are going to make the purchase no matter how much is charged. Let’s take a look at a few examples.
Examining Silent Inflation with Coffee
Coffee is the latest example that I recently came across that really irked me. We all remember the old metal coffee cans that held 34.5 ounces of ground coffee. Pretty standard for most coffee companies for many years. A few years ago they did away with the metal canisters and replaced them with plastic. This wasn’t that big of a deal. The coffee companies were saving money on packaging, charging us the same price and pocketing the difference. But at least we were still getting what we paid for – 34.5 ounces of ground coffee beans. This had nothing to do with inflation. Just smart choices made by a manufacturer to increase profits.
The real irritating part of the coffee example is what happened more recently. I personally have been drinking Maxwell House coffee for most of my adult life. Where I live, a price for a can of coffee has ranged anywhere from $5 to $10 for most of the last 20 years. It varies from year to year, I’m guessing based on coffee bean crops and prices. Most recently, $6.99 is a great sale price for a can of coffee. Whenever we find a good sale price, we stock up and usually buy 3 cans. So, when my wife came home recently with a new can of Maxwell House coffee that was “on sale,” for $6.99 – I immediately saw the new container, realized what had happened and got really annoyed.
They had changed their packaging again! It’s still in a plastic container, but it was obviously smaller. The new canisters hold only 29.3 ounces of ground coffee. $6.99 used to be a great deal for a 34.5 ounce canister of coffee. Now they’re trying to make it look like that same price is the same great deal for a canister with less coffee in it. Doing some simple math ($6.99 divided by 29.3 and then multiply those results by 34.5) shows that paying this “sale price” on the new container is equivalent to paying $8.23 on one of the old containers (34.5 oz). Not only are they killing us with this silent inflation on sale price items, but they are practically stealing when selling this stuff at regular price.
More Silent Inflation Examples
Toilet paper is another example. Have you noticed how much smaller in width toilet paper is than it used to be? That’s right – you’re getting less toilet paper for the same price or even increased prices. If current trends continue, your roll of toilet paper will barely cover half of the standard toilet paper holder that is hanging somewhere near your porcelain throne. This one doesn’t seem like that big of a deal. That is until you start accidently getting your own waste on your hands because the toilet paper isn’t big enough. That is just a crappy situation all around and can be blamed mostly on silent inflation.
Ice cream is another big one for me. I love ice cream and eat a monster bowl of it almost every night. Remember when they used to sell ice cream in half gallon cardboard containers? Good luck finding one of those now. A half gallon is the same as two quarts. I typical ice cream container is now 1.75 quarts, or sometimes as small as 1.5 quarts. And with ice cream, prices aren’t even staying the same. They’re going up! Higher prices plus smaller containers equals lose-lose for us consumers. This one is an example of silent inflation combined with flat out price increases.
The three examples above are some of the most notable of late for me. I’ve witnessed several others as well. Silent inflation is most noticeable in the grocery industry. Look how few chips are in the bottom of that large bag that is still the same size. Look at the sizes of the boxes of cereal or crackers that are selling for similar prices to when the boxes were bigger. Examples are everywhere. Your average grocery bill might seem to be the same as it was a few years ago, but you are having to buy items more often than you used to. We are going to get hit with inflation no matter what. We are all victims! I would just prefer that it be done out front and honestly rather than using trickery and mind games. That’s one man’s opinion.
Readers: What examples of silent inflation have you noticed lately? Are you as annoyed as me and would you prefer that they simply increase prices?
This post was written by Matthew Allen from Dumb Passive Income.