Less product, same price
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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