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Less product, same price

Patricia Russell and Ralph Ashley compare prices while shopping for groceries at Lorenzo's Supermarket in North Miami, Fla.

TEXT OF STORY

Tess Vigeland: If you're one of the lucky folks who have the day off today, perhaps you're using it to check some errands off your to-do list. If one of those errands is a run to the grocery store... beware of the shrink. Not the couch shrink. Not the shrink-wrap. No, I'm talking about product shrinkage. Many companies are reducing the size and weight of everything from cereal boxes to soda cans. But if you're expecting reduced prices to go along with the reduced package... yeah right. Is this a subtle way to raise prices? Definitely. Is it deceptive? Here's Marketplace's Sean Cole.


Sean Cole: The poster product for this phenomenon is Skippy peanut butter. The regular-sized jar looks the same as always, until you turn it upside down.

Frank Luby: The jar used to have a smooth bottom. It now has an indentation, which takes as couple of ounces of peanut butter out of the product.

Frank Luby is a marketing and pricing consultant for Simon Kucher & Partners in Cambridge, Mass. He says that big dimple in bottom of the Skippy jar...

Luby: Allows them to keep the same price point. But you get slightly less.

Cole: I guess my follow-up question to all of this is "What the hell?"

Luby: [Laughs]

Cole: Like is that OK?

Luby: To be perfectly honest, I think it is OK.

With the price commodities going up this year Luby says shrinking containers might be the lesser of three evils. The other two being cheaper ingredients, which would change the taste of your peanut butter, or alienating even the most loyal consumers with higher shelf prices. Now, Skippy is made by Unilever, a food conglomerate that also put a dent in the bottom of Hellmann's mayonnaise and shrank your carton of Breyer's ice cream. No one there would go on tape but when I raised the deception question, a spokesman said the new weight is clearly marked on the package. And Frank Luby says the per ounce and per pound labels on the grocery shelf really help.

Luby: So, yes, it's deceptive. But I think it would be even more deceptive if you didn't have that level playing field that's created by the per ounce comparisons, which we can take a close look at when we go to the supermarket.

The supermarket down the road from his office.

Luby: And I wanna go look a the box of Total.

Total cereal. His brand.

Luby: I grab this box and this is relatively thin.

Cole: It looks really thin.

Luby: It looks really thin.

Whereas the face of the box is as wide as always. General Mills, which makes Total, told me it only shrank down some of its cereal sizes -- that the smaller ones are now cheaper, and that this is old news. And as Luby and I were checking out that famous dent in the Skippy jar...

Cole: How deep is that would you say?

Luby: It's probably as deep as a fingernail.

We got kicked out of the store.

STORE MANAGER: OK I can't have you doing any recording in the store or filming without permission from headquarters.

Cole: OK. Do you mind if I buy these?

STORE MANAGER: You can buy 'em, yeah.

So I went to the check out counter with two boxes of Total and a jar of Skippy.

Cole: Oh. $11.27. Wow.

Way more than I thought it was going to cost.

Cole: I'm whipping out two more dollars here.

All the money in my wallet. And Luby says that proves the point.

Luby: You're going to remember that that cost more than you expected and that's going to stick with you. But the package sizes, to the extent that you knew them anyway before you started working on this story, will continue to fade.

But I'm not so sure. Because I went to another grocery store, bought a bunch of downsized items and did a little show and tell with folks in the parking lot. Peggy Pellegrino and her friend June Mackey were so mad about this issue you could barely understand them.

Cole: So you know about this?

June: Yeah.

Peggy: Of course we do.

Cole: Really?

June: We're shoppers.

Peggy: We're consumers.

It's disgusting, Peggy said. But is it deceptive, I said.

Peggy: Of course it's deceptive. They don't bring out a big ad and say we're going to charge you more or the same and give you two ounces less.

June: Not only that.

Peggy: They make you find out for yourself.

June: Not only that, it's harder to scrape it out at the bottom with the indented things.

Others in the parking lot had a different take. They said consumers have to watch out for themselves. But pretty much everyone said they'd rather just pay more for the original sized products.

Oh, and this radio story was reduced from four and a half minutes to 3:15, so -- in Boston I'm Sean Cole for Marketplace.

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I guess Marketplace is pulling the same thing the food companies are doing by giving us the same report I heard several weeks ago

This report on Planet Money was already starting to be backward looking, because in our own grocery a couple of weeks ago, I finally started seeing some price reductions here and there, name brands, etc.

Now, when we went yesterday, the price cuts are spreading, and now about 1/4 or so of the items we normally buy have price cuts.

The big reductions in bulk grains, meat, fuel, etc are finally working through.

I think the delay was due to people switching away from restaurants and so groceries saw plenty of demand. Now that wave is settling down.

So, I guess you can update this report in a week or so!

Peoples could downsize there food portions. Lose weight. Have less medical problems. Save money & have a longer life.

as above...old and busted.
same ol' story, same ol' report.
MARKETPLACE: is this your recycling?

This story was reduced from 4 minutes to 3:15....and also already used. Good story, but we heard it a month or so ago....you should have disclosed this as a "classic" or some such. Now youre just as bad as the Skippy Peanut Butter people.

Several months ago Earth Balance Buttery Spread, owned by GFA Brands, Inc, Paramus, NJ, was downsized from 16 to 15 oz. I called both Trader Joes and Earth Balance and told them that when I want a pound of butter or spread, I want a pound. Earth Balance didn't even offer a coupon, but then, since I told them I wouldn't purchase any further product until they went back to a full 16 oz, I didn't offer any options. I bake often and recipes will call for a pound before they will call for 15 oz. If the consumer would fight back we could stop this before it reaches the end point of getting nothing for something. You know the old phrase "We get the government we deserve?" And while I'm ranting, have you ever noticed a product called Tofutti that gives the impression of being healthy with 'tofu' in the name. There is absolutely no tofu in the product, it is almost entirely hydrogenated soybean oil. I called both Trader Joes and the Tofutti company several years ago, but I must have been the only one. PT Barnum was right.

Thanks, JM

Ah, yes, speaking of Bryer's, it's on sale at Stop 'n Shop 2 for $5.00 this week. A treat for sure -- because I would never pay $6.00 for something this small. And all those small bottles of dish and laundry soap that are supposedly 2x concentrated. Yeah, I'm not buying it because they don't perform like they're concentrated. And, boy, has the price gone up on laundry detergent. I haven't been brand loyal in a long time. I mean, what's in a brand? It's really just a name now, just a small part of a big conglomerate.

What's really gotten to me is the downsizing of yogurt. I've been eating yogurt since the 70s and the single serving containers were always 8 ounce cups. Now everyone has shrunk their containers to 6 ounces.

You assume they sold 8 ounce cups because 8 ounces was a serving. Now, when I eat the 6 ounces I don't feel satisfied when I finish. So, now I buy a large container of store brand plain yogurt and add a few tablespoons full of plain to the 6-ounce container.

Yep, the villiam is Breyer's, one of the companies you identified in the story as a downsizer.

No matter how you to try to disguise it, selling less for the same cost is a price increase. As I recall from when my children were younger, diapers decrease in package size one year, and go up in price the next.

I emailed Irish Spring months ago when they shrank from 4.5 oz to 4.0oz commenting that their carbon footprint would be bigger because same package, less product. They sent a coupon $.50 off next purchase, without a social comment.

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