The flip side of inflation: ‘Skimpflation’ hits everything from food to hotels

The highest inflation in 40 years has prompted manufacturers to resort to “shrinking inflation,” a cost-saving tactic to reduce package sizes while keeping the price the same. Now, businesses are trying another way to save money: “net inflation.”

Some companies reformulate their products using cheaper ingredients to lower their manufacturing costs, a ploy some have called skimpflation, according to consumer advocate Edgar Dworsky, founder of Consumer World. The change is usually not communicated to consumers, who may not be aware of the change in ingredients but are charged the same price for the product.

A recent example of normalization noticed by consumers involved Conagra’s Smart Balance spread, a dairy-free butter substitute. Conagra recently changed its formulation to reduce its share of vegetable oil from 64% to 39% — a reduction of almost 40% in vegetable oil.

However, customers who noticed the change have flocked to the Smart Balance website in recent days to complain about the new lineup, calling it “terrible”, “disgusting” and “unwanted”.

“We’ve been loyal customers of Smart Balance for a long time, but something has changed,” one customer wrote as part of his one-star review on Monday. “It’s now too soft, spits everywhere when frying an egg, and won’t melt on toast. Just as bad, it’s over $10 now for the large tub. That tub is headed for the trash.”

A Conagra spokesman said the company changed the formulation of Smart Balance products “to facilitate their distribution.” He added, “We have listened to the feedback from consumers and decided to return to the previous recipes in the coming months.”

Curbing inflation can save costs or even boost a company’s bottom line, at least in the short term, but it also risks turning off consumers, who may seek alternatives they believe provide better value or quality, Dworsky said. Some angry Smart Balance customers have vowed in their reviews to switch brands due to the perception of poor quality after the prescription change.

“It’s harmful in the financial sense that you’re getting a little less quality for your money, and it hasn’t necessarily been clearly disclosed,” Dworsky added.

Changing toilet paper

Another product Dworsky pointed to as an example of skimpflation is Scott 1,000-sheet toilet paper, which has drawn negative reviews on its website for what consumers say is a decrease in quality.

“The quality has gone…well…down the toilet! This is NOT pre-pandemic Scott,” one consumer wrote on Scott’s site in September. “The sheets are so thin they’re transparent. I don’t even think it’s a full sheet. 1/4 sheet at best.”

Kimberly Clark, the maker of Scott toilet paper, did not respond to a request for comment.

Dworsky said he happened to have an older package of 1,000-sheet Scott toilet paper at home, and he also bought a new package. Weighed the two packages and adjusted for the length change for the rolls. Using an apples-to-apples comparison, he found that the new rolls weigh 20 percent less than the older ones, he said.

“It wasn’t just the consumer perception that the product had become thinner – it really was,” he said. “How would a consumer know by looking at the package? You wouldn’t know.”

Hospitality companies are also cutting back on consumers, such as hotels that have cut housekeeping services during the pandemic.

Hotels have cut back on services during the pandemic, partly in response to difficulty recruiting staff and as revenue has declined due to layoffs and other challenges. Daily housekeeping still hasn’t returned to some hotels, even though they continue to charge the same rate, according to St. Louis-Dispatch.

“Now there are more incentives [for skimpflation] because manufacturers’ bottom lines are being squeezed and they’re looking for ways to save money,” Dworsky noted.

“It’s not illegal,” he added, but said customers might think twice before using the product again.

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