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America's Shrinking Groceries


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America's Shrinking Groceries

By KATE PICKERT

Mon Jun 30

American supermarkets are epics of excess: it often seems like every item in the store comes in a "Jumbo" size or has "Bonus!" splashed across the label. But is it possible that the amount of food Americans are buying is, in fact... shrinking? Well, yes. Soaring commodity and fuel prices are driving up costs for manufacturers; faced with a choice between raising prices (which consumers would surely notice) or quietly putting fewer ounces in the bag, carton or cup (which they generally don't) manufacturers are choosing the latter. This month, Kellogg's started shipping Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks containing an average of 2.4 fewer ounces per box.

Similar reductions have recently happened or are on the horizon for many other products: Tropicana orange juice containers are shrinking from 96 ounces to 89; Wrigley's is dropping its the 17-stick PlenTPak in favor of the 15-stick Slim Pack; Dial soap bars now weigh half an ounce less, and that's even before they melt in the shower. Containers of Country Crock spread, Hellmann's mayonnaise and Edy's and Breyer's ice cream have all slimmed down as well (although that may not necessarily be a bad thing).

"People are just more sensitive to changes in price than changes in quantity," says Harvard Business School Professor John Gourville, who studies consumer decision-making. "Most people can tell you how much a box of cereal costs, but they have no clue how much is actually in it."

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This is hardly new.

Hersheys charged 5 cents for a candy bar for years. They would decrease or increase the size depending on the cost for them, but the bar was always a nickle.

They prided themselves on that idea and marketed it that way for the first half of the century.

Another BS item for consumers to get up in arms about.

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Ya know... the one thing I hate about grocery stores is that they are not geared towards single people. You always have to buy things in large quantities. Meats is always pre-wrapped and pre-measured. blah, blah, blah, you get the point...

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Meats is always pre-wrapped and pre-measured.

I should hope so. I wouldn't want raw meat just sitting out unwrapped, with customers handling it. And pre-measured; yeah, I want to know how much meat I'm buying.

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I should hope so. I wouldn't want raw meat just sitting out unwrapped, with customers handling it. And pre-measured; yeah, I want to know how much meat I'm buying.

Let me do the math for you...

Let's say I only want a certain amount of any one thing...

At a butcher shop, I can ask for that and get it.

At a grocery store, I can't.

I must take what they present.

;)

My point is... "it would be nice" if things were in smaller quantities for people who don't need to feed a small nation. It would be tedious to have to go to multiple locations for all that I need.

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Let me do the math for you...

Let's say I only want a certain amount of any one thing...

At a butcher shop, I can ask for that and get it.

At a grocery store, I can't.

I must take what they present.

;)

My point is... "it would be nice" if things were in smaller quantities for people who don't need to feed a small nation. It would be tedious to have to go to multiple locations for all that I need.

Ellis hmmmmmm you don't have a freezer? I couldn't picture myself going to the grocery store every day for my meats. That's why I buy in bulk and freeze them individually.

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More like America's Shrinking Dollar.

Does anybody really buy the federal government's number on inflation? I think they reported 2% annualized inflation in the first quarter. Um, that's BS.

I buy it, for two reasons.

1) While I do not doubt that the federal government would, indeed, "cook the books" on inflation if they could, I don't think it's possible for them to do so. The "basket of goods" they use for determining prices, as well as the prices of each item, are a matter of public record.

2)As of 6/27, the 10 year TIPS yield was 1.48. The 10 Year Treasury yield was 3.99.

The difference between the two is 2.51. That means that the Bond Markets expect inflation over the next ten years to be right around 2.5% (or a little less, actually, since there is an uncertainty risk premium built into the treasury yields), which is well in line with the government numbers, and there's no chance of conflict of interest like there is with the government, because private bond traders have no incentive to make the government look good, and every incentive not to (if they're wrong, they lose money).

Remember, not all aspects of the economy are inflationary. Certainly commodities are placing inflationary pressures on our economy in certain areas. The Fed's recent monetary policy could also be said to do so.

On the other hand, though, there are deflationary pressures in the market, too. Consider Is The Inflation Scare Over Yet?. An excerpt:

The recent downtrend line has been broken. Is the inflation scare over? That is hard to say. It's much easier to say is that it should be.

Destruction of credit via massive writedowns in banks and financials, accompanied by sharply rising unemployment rates, falling wages, and curtailment in credit lines everywhere is simply not an inflationary environment.

Of course, this all starts with a proper definition of inflation. In Austrian economic terms, inflation is an expansion of money and credit. Money is not expanding and neither is credit. There is an illusion that they are as discussed in Bank Credit Is Contracting.

We have reached Peak Credit, a once in a lifetime event.

Those focused on the CPI, M3, and other such measures are completely missing the boat. Yes, the CPI is understated (at least on the surface). However those using CPI data to short treasuries over the past few years have had their heads handed to them. OK there was a selloff from March to June, but seasonally this is an expected event. April and May are typically the worst months (tax season).

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Ellis hmmmmmm you don't have a freezer? I couldn't picture myself going to the grocery store every day for my meats. That's why I buy in bulk and freeze them individually.

Well, I simply say I'm probably being too ****y about it.

I just wish there were smaller sizes for products, not just in the meat section.

I don't cook for 2.

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How about the laundry detergent containers that have been shrunk and the formula concentrated?

I thought that was a great idea to save a little water and a lot of plastic.

That's a good point. I was thinking more of food stuffs.

If you shrink the size of a can of chef boy am I hungry, I'll just eat three instead of two, like I do now.

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