As shoppers in a cost-of-living crisis, we have become rather sensitive to when something suddenly costs more. Whether on the shelves of a grocery store or the final total at the checkout, we are quick to spot the price change from last week and complain to whoever is nearest.
We are far worse at noticing when we get less for our money. Like when there is quietly less inside the box, packet, or wrapper than there used to be. Both impact our finances, but only one is instantly noticeable.
It’s what’s on the inside that counts
When a brand is under cost pressure, it has two ways to pass that financial burden on to the consumer. It can raise the prices of its products, which almost everybody notices. Or it can quietly reduce the size and leave the price alone, which almost nobody does.
Many brands prefer the second option given how the change is often overlooked, thereby protecting customer loyalty during times of financial difficulties. This is called shrinkflation.
The shelf price is displayed large. It is something we see instantly and can track over time. The unit price, like the cost per ounce, is underneath in small print and is the number we tend to miss. It moves in increments too small to register. But it is moving, and it costs us exactly what a price rise would. However, our reactions to these changes are not always the same.
Boxes of cereal, bottles of laundry detergent, and bags of candy or potato chips are the usual casualties. Over time and to the casual eye, the box, bottle, or bag looks unchanged on the shelf. Sometimes the packaging really is shrinking, in increments too small to notice. Sometimes it stays exactly as it was and simply holds less, with more of the product replaced by air.
Brands can pass on extra costs without ever announcing them, and it works because the price has not moved, which keeps customers happy. Most of the time nobody looks any closer than that.
Why smaller sizes are difficult to notice
It is very difficult to calculate volume just by looking. So we estimate from what we can see. Height skews these dimensional estimates, nudging the mind toward believing there is more inside.
Raghubir and Krishna (1999) found that taller containers are often perceived as holding more, even when volume is identical to that of shorter and wider containers. This means our judgment of size can be influenced by shape alone. Perhaps that is why so much of what we buy comes in tall, vertical rectangular packaging (like the cereal, detergent, and chips) to convince us we are getting more than we actually are. Have you noticed?
Psychophysics, the study of how physical stimuli translate into what we perceive, explains why shrinkflation is both stealthy and effective. Known as the Weber-Fechner law, it states that the smallest change we can detect in something (the just noticeable difference, or JND) is not a fixed amount. It is a proportion of what we started with. Figures between a 5 and 15 percent downsize get quoted, though these are often just industry rules of thumb. Regardless of the exact proportion, what matters is that there is a proportion below which change is not merely ignored but becomes virtually invisible.
This law gives brands a threshold and a way to stay hidden under the JND radar. Remove little enough, and there is little to notice, whatever the size or weight was to begin with. But consumers are only blind for so long.
The threshold applies to single changes. Shrinking the same packaging two or three times in quick succession pushes the total loss past the JND limit, and people notice the outcome of cumulative changes far more readily than any one-off adjustment.
What shoppers don’t notice won’t hurt them
Janssen and Kasinger (2026) examined a decade of retail scanner data covering approximately four million products across U.S. retail outlets like grocery stores, drugstores, and mass merchandisers. They found that nearly 2 percent, or around 77,000 individual products, were downsized over that period, more than five times as often as products were made bigger, and with almost no drop in price.
More interesting was the cost to the brands doing it. A 1-percent price increase reduced sales by around 1.2 percent. A 1-percent reduction in size reduced sales by roughly half as much. This asymmetry is nothing new. Gourville and Koehler (2004) found that consumers have a greater sensitivity to product price than to product quantity changes.
Janssen and Kasinger also measured how shoppers responded to such shrinkage. Rather than settle for less, they bought another one. Total spending went up, which is the opposite of how we usually behave toward a price rise we have actually noticed. When the shelf price goes up, which is the number we watch, we buy less. When the unit price quietly rises, we buy more.
What shoppers do notice can hurt the brand
Shrinkflation works. That is, until a customer notices.
Evangelidis (2024) ran five experiments comparing how people judge a price increase against a size reduction costing them exactly the same. A large majority viewed the price increase as fair, given that costs were rising in the economy at the time. For a size reduction, views changed. More people called the downsizing unfair than called an identical price rise unfair. Money appears not to be the motivating factor at all in these assumptions.
What drives such judgment is that downsizing reads as an attempt to hoodwink. Changing the price of a product is simple economics, which everyone can see and understand. Changing the size of a product is a design choice, where finding out the cost takes rather more effort. Price runs on logic. Size runs on emotion.
If it is easier to track a price rise than a size reduction, perhaps that is the part we object to. Not paying more, but not being told. When it comes to increasing product prices or shrinking product sizes, size, it seems, does matter.
