Sunday, January 23, 2011

Some Packages Are Getting Smaller While Price Stays The Same

CBC 'Marketplace' Looked Into The
INCREDIBLE SHRINKING PRODUCTS
Companies 'Downsize' Products 
Rather Than Increase Prices

In a recent segment on CBC's Marketplace, Tom Harrington took to the supermarket aisles to see if consumers are aware of this latest pricing tactic by food companies.

If you are an attentive shopper (like I am) you will have noticed that products that used to come in 2 litre sizes now come in 1.89 or 1.65 or1.5 litre sizes for example. Mayo that used to come in a 1 litre bottle shrunk to 950ml and now some are 890ml. A pasta sauce used to be a 700ml bottle and now is a 650ml bottle.

The same principle applies to many different products where the companies have not increased to price of the product on the shelf but have reduced the size, which effectively increases the price. Although they do not explain it that way. 

For example Nestle explained the policy this way:
".... with continuing rise in commodity prices, slight modifications were made to the packaging .. in order to keep pricing consistent ..."

Kraft gave this explanation:
" ... package sizes and shapes change frequently for a number of reasons ..."

Heinz had this to say:
" ... moving to a smaller jar size ... allowed us to hold consumer prices steady in spite of significantly increased costs...."

Tropicana offered this reason:
" ... consumers generally prefer a slight adjustment to packaging size over a price increase..."

The bottom line from this whole story is simply that companies have to make what they feel is a good profit (fair is relative) and will accomplish that while avoiding as much 'consumer push back' as they can. Clearly they think this can be accomplished by reducing package sizing rather than increasing prices. This likely suggests their studies have shown most consumers won't notice the difference between 700 ml and 650ml but would notice a 10% price increase.



allvoices

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