Main Street

Paying more for less

In an effort to disguise higher food prices, companies are putting less food in the same sized packages. From the NY Times:

One shopper noticed when she made dinner for her 9 kids:

“Whole wheat pasta had gone from 16 ounces to 13.25 ounces,” she said. “I bought three boxes and it wasn’t enough — that was a little embarrassing. I bought the same amount I always buy, I just didn’t realize it, because who reads the sizes all the time?”

Ms. Stauber, 33, said she began inspecting her other purchases, aisle by aisle. Many canned vegetables dropped to 13 or 14 ounces from 16; boxes of baby wipes went to 72 from 80; and sugar was stacked in 4-pound, not 5-pound, bags, she said.

It’s stealth reduction.

In every economic downturn in the last few decades, companies have reduced the size of some products, disguising price increases and avoiding comparisons on same-size packages, before and after an increase. Each time, the marketing campaigns are coy; this time, the smaller versions are “greener” (packages good for the environment) or more “portable” (little carry bags for the takeout lifestyle) or “healthier” (fewer calories).

Marketing strategies are so cynical. They take for granted that we’re too dumb to notice.

This was the paragraph that grabbed me:

Thomas J. Alexander, a finance professor at Northwood University, said that businesses had little choice these days when faced with increases in the costs of their raw goods. “Companies only have pricing power when wages are also increasing, and we’re not seeing that right now because of the high unemployment,” he said.

The unemployment numbers haven’t gone down significantly, but we never hear about the huge numbers of people out of work any more. We never hear about job creation. All we hear about is the deficit, and how dismantling the social safety net is the solution. Even I know that a budget isn’t balanced by cutting alone. We need revenue – the kind created by having a working population.

Food and gas prices are going to continue to rise. This means tougher times ahead for those who are already hurting.

Tags: economy, unemployment