Hidden Inflation: The Sneaky Way Manufacturers Raise Prices

What is Hidden Inflation? It's the way prices are raised on a product without really raising the prices. Confused? Most of us don't notice hidden inflation, and that's the way manufacturers want it to be. How can they raise prices without us noticing? The actual price does not go up...but the size of the product goes down. For example, take those little snack size packages of gelatin and pudding. When they first hit the market, an individual serving was one-half cup (4 ounces). Today, most brands list a serving size as "one snack" or 3.5 ounces. To reduce each serving by one half an ounce is barely noticeable to the consumer, but the savings to the corporation are tremendous. You may have noticed that your favorite candy bar doesn't seem quite as big as you remember, or your usual brand of shampoo doesn't last as long.

Besides reducing the actual amount of the product in the package, many manufacturers change the shape of the package or bottle. They may switch from using a cylindrical bottle to one that is hour glass shaped. Just changing the shape of the bottle can reduce the amount the bottle will hold by several ounces. If your shampoo usually costs $3.59, and it's still $3.59, you might be thinking that the shape of the bottle is more modern or easier to grasp. However, if the shampoo is in the same old bottle and now costs $3.99, you might start looking for a different shampoo. Manufacturers count on the majority of us not noticing size reduction.

Another way a manufacture uses hidden inflation is by lowering the quality of a product. When a recipe calls for butter or margarine, what do you use? If you said "margarine", think again. Although you can find margarine at the grocery store, most of what we think of as margarine is actually labeled "spread". Spread is made from margarine, but it has water incorporated into it. The manufacturer has convinced us that "spread" is better because it is easier to spread, and it has fewer calories than 100% margarine. If you use spread in your baked goods, you might be sacrificing the quality of the end product.

Is there anything we can do about hidden inflation? No, probably not. But, as consumers we need to be knowledgeable and pay attention to the products we buy. In some cases, we just might want to switch to another brand. Or , we might want to pay more for a product that is of higher quality.