Ellyn Newall of Edmonton felt duped after a recent grocery shop.
She had purchased two boxes of family-sized Honeycomb cereal for the same price. But when she unpacked her shopping bag, she noticed one box was slightly taller — and slimmer — than the other.
Turns out the shorter box is older packaging, which is being phased out. The taller box is new packaging — but taller doesn’t mean more product.
In fact, when Newall took a closer look, she discovered the new box has 70 grams less cereal — a reduction of almost 12 per cent.
“The first thing you think is, like: ‘How could they do that to us?’ You feel upset. You feel deceived,” she said.
It’s called shrinkflation and occurs when food producers shrink items but not the price or packaging, making it hard to detect. It has been going on for years.
Ellyn Newall of Edmonton said she would not have purchased the new box of Honeycomb cereal, left, if she had known it contains less cereal than the older box, right. (Samuel Martin/CBC)
“Everything seems to be more expensive now. And by simply reducing the size of their products, people maybe feel like they’re being tricked a little bit,” said Sylvie De Bellefeuille, a lawyer with the consumer advocacy group Option Consommateurs.
U.S.-based Post Consumer Brands, makers of Honeycomb cereal, did not reply to requests for comment.
“If I had noticed this in the store, I absolutely would not have bought this box,” said Newall, referring to the new box with less cereal.
“I would honestly like to say to the federal government to please, please find some way to regulate this.”
How widespread is it?
Because shrinkflation can be hard to identify, it’s difficult to know precisely how widespread it is and if it’s on the rise.
CBC News combed grocery stores over the past couple of weeks and found several cases of shrinkflation.
For example, Mondelēz’s Wheat Thins crackers has shrunk 10 per cent to 180 grams, Kraft Heinz’s Original Kraft Dinner has been reduced 11 per cent to 200 grams, and General Mills’s Betty Crocker SuperMoist Cake Mix has shrunk 13 per cent to 375 grams.
Despite the reductions, the price and packaging remained the same for each product.
Betty Crocker SuperMoist Cake Mix has shrunk from 432 grams to 375 grams — a 13 per cent reduction. (Sophia Harris/CBC)
General Mills did not reply to requests for comment.
Kraft Heinz and Mondelēz said they reduced their products to offset higher production costs.
The industry group Food, Health and Consumer Products of Canada (FHCP) echoes that argument.
“Food manufacturers are challenged by increasing costs,” FHCP spokesperson Anthony Fuchs said in an email. “Rather than simply pass these costs directly on to consumers, they consider alternatives that can include adapting the size of [the product].”
But consumer advocate De Bellefeuille argues shoppers are more likely to notice a price hike than a subtle weight change.
“With more transparency, at least we would know that we have less for the same [price], so that we can make better informed decisions,” she said.
CBC News data journalist Daniel Blanchette Pelletier has been tracking shrinkflation. Here are some examples.
They have garnered millions of views and heated viewer comments.
“They’re furious. Not at me, but at the fact that this is actually something that’s happening,” he said.
When CBC News met with Chauhan, he was making a TikTok video about Ben and Jerry’s ice cream, which recently shrunk by 5.4 per cent to 473 millilitres.
This month, French supermarket chain Carrefour started putting labels on its shelves to warn shoppers of products that have been downsized. (Carrefour/Linkedin)
In 2013, Option Consommateurs submitted a report to the federal government advising it to regulate shrinkflation. Recommendations included requiring companies alert customers on food product labels, as is done in Brazil.
But Fuchs, with industry group FHCP, warns new labelling requirements could have the “unintended impact” of increasing companies’ costs.
Justin Simard, a spokesperson for Innovation, Science and Economic Development Canada, told CBC News in an email that Ottawa has identified shrinkflation as a practice that hurts consumers.
However, he had no details yet of any type of action plan.
As for Newall, once she discovered the new boxes of Honeycomb contained less cereal, she took action by buying several older boxes — before they disappeared.
“I know that once that sells out, I’m no longer going to get [the same] value for my money.”
Tax implications
Canadians should also be aware that when some food products shrink below a certain amount, they must pay sales tax.
Although many grocery items are tax-exempt, shoppers must pay tax on snack foods such as muffins, pastries, cereal bars and cookies in packages of less than six and containers of ice cream under 500 millilitres.
Tubs of Ben and Jerry’s and Häagen-Dazs ice cream each recently shrunk from 500 millilitres to 473 millilitres and 450 millilitres respectively. That means Canadians now not only get less per tub, but they’re also hit with sales tax.
Chauhan discovered this when he purchased two tubs of Ben and Jerry’s to make his TikTok video, and was charged 13 per cent harmonized sales tax.
“We’re getting taxed on this because it’s technically a single serving. Whether the average consumer is OK with that is a different story,” he said.
Despite ever-shrinking products, the Canada Revenue Agency told CBC News it’s not reconsidering its rules for taxable snack foods.
WATCH | How shrinkflation affects shoppers:
How shrinkflation affects Canadian consumers
1 year ago
Duration 2:06
Featured VideoTo deal with the impact of rising inflation, companies are reducing package sizes while charging the same prices in what’s known as shrinkflation. Experts suggest consumers can avoid shrinkflation by paying attention to the price per unit rather than the total price.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
