Inflation by stealth

Package of doughnuts from Walmart

Package of doughnuts from Walmart (Detail)

According to the Bank of Canada the current inflation rate, May 2015, is 2.2%. (Source: http://www.bankofcanada.ca/rates/indicators/capacity-and-inflation-pressures/) Yet some observers have noted that the price increases are actually much higher. Some of the price increases are easy to see. When the price of gasoline goes from $1.10 per litre to $1.30 per litre the price increase in undeniable.

Yet other price increases are less noticeable. Walmart sold a box of a dozen muffins for $4.00. Walmart still sells a box of a dozen muffins for $4.00. The inflation is reflected the number of muffins and thus the cost per muffin. The new box only contains nine (9) muffins, so a price increase of 25%. Peek Freans did it with cookies reducing the number of cookies while keeping the box the same size and going from 350 grams to only 300 grams

2013 Packaging

2014 Packaging

Coca-Cola has done it with the personalized bottles of Coke changing the size from 591 millilitres to 500 millilitres.

Yes it is a small detail, but one that leads to higher prices for consumers and higher profits for brands and retailers.