Find yourself asking "Where's the beef?" when you order a burger these days? You could be a victim of "Shrinkflation." Rising demand post-pandemic and disrupted supply chains are impacting many of the goods and foods we consume. Will we be getting less of a product for the same price as companies try to protect their bottom lines? Hear what a UCF economist and Marketing professors have to say about what to expect and whether you need to watch out for Shrinkflators around every corner.

 
Featured Guests

Uluc Ayson, Ph.D. - Associate Professor in the Department of Economics at UCF
Anand Krishnamoorthy, Ph.D. - Associate Professor of Marketing
Muge Yayla Kullu, Ph.D. - Associate Professor of Marketing at UCF
Axel Stock, Ph.D. - Associate Professor of Marketing
Yael Zemack-Rugar, Ph.D. - Associate Professor of Marketing at UCF

Episode Highlights

00:14 - Introduction
01:26 - Are we experiencing inflation?
03:40 - What prompts companies to become shrinkflators?
05:30 - What are some examples of shrinkflation?
08:40 - Are we more sensitive to price than changes in service or packaging?
13:00 - Are there any consumer benefits to shrinkage?
28:00 - Will shrinkflation be here in a year?
32:04 - Dean Jarley's final thoughts

 
Episode Transcription

Assorted Speakers:“Where's the beef?” “Why is my six-count nugget now a five count nugget? Where's my other nugget?” “You mean shrinkage?” “Significant shrinkage.” “So you feel you were short changed?” “Yes.”

Zemack-Rugar: So apparently if you reduced one dimension, but you make it longer, then people perceive the same size because we can't assess volume.

Jarley (Host): : As Erin Turner would say, this is how they get ya.

Jarley: : This show is all about separating hype from fundamental change. I'm Paul Jarley, Dean of the College of Business here at UCF. I've got lots of questions. To get answers, I'm talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? Onto our show…

Jarley: A couple of weeks ago, I read an article claiming that for a variety of reasons, some companies were cutting back on the size of their offerings rather than increasing their price. I was intrigued. So I sent an email out to the faculty and within an hour, I had 10 people who had volunteered to become part of a podcast on this subject. It made me think that shrinkflation was at the very least, well, an academic thing. Conflicting schedules reduced the size of our panel from 10 to five, but I have one economist and four associate professors of marketing with me today to talk about what's going on. Muge Kullu, Yael Zemack-Rugar, Axel Stock and Anand Krishnamoorthy all hail from our Marketing Department. Listen in.
Before we get to shrinkflation, Uluc, are we experiencing inflation right now?

Ayson: Yes, we are. So if you look at TPI inflation, it's called headline inflation. It has increased in the past three months. We went from below 2 percent to 2.6, 4.1. Now it's just four points, 4.6. And then now it's just at 4.9, uh, which is considered high based on the past three decades. And it's high compared to the Fed implicit inflation target as well, which is 2 percent. So it is increasing.

Jarley: It's a really odd situation here. We've had an economy that's been largely shut down for a year. That's coming back. Give me some sense of how much of this is sort of a supply chain issue and how much of it is due to other factors.

Kullu: Companies had trouble from the supply end, also from the demand end, you know, like people just ran to the store and cleaned off the shelves for toilet paper.