Shrinkflation at the grocery story is real, studies confirm

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Canadians have long suspected they are paying the same prices for less food at grocery stores, and numerous studies and media investigations have proven them right.

A recent report from Community Researchers, a Toronto-based non-profit organization, confirms that Canadian manufacturers have been downsizing their packages over the past five years, despite ongoing monitoring and complaints from governments and consumer groups.

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Shrinkflation refers to a reduction in the net quantity of a product while its retail price remains the same. A study found that 20 per cent of 60 products sold in Metro Inc., Walmart Inc, and Loblaw Cos. Ltd. No Frills stores had shrunk in size between 2019 and 2024. One in five items in your shopping cart is likely affected.

The research was conducted by collecting data from an archive of grocery flyers and evaluating the size of products in 2019. After comparing the data to the current packaging sizes, it was determined that, of the 60 products analyzed across 20 product categories, 12 had been subject to shrinkflation.

While products like beverages, fruits, whole grains, and seafood did not see any shrinkflation, Community Researchers deemed fruit pouches, frozen chicken bites, and chocolate biscuits as “the worst offenders.”

It isn’t just your sweet tooth that is taking a hit, however — the top five product categories with the highest shrinkflation were baby and toddler food, poultry, cooking oils, processed meat and items containing higher amounts of sugar and fat.

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A fruit sauce pouch made by Gogo Squeeze had shrunk by 25 per cent since 2019.

The researchers chose the year 2019 to measure the effects of shrinkflation over a five-year period starting prior to the COVID-19 pandemic. Manufacturers have historically resorted to shrinking the size of products to combat rising costs during inflationary times, but for consumers, it seems like a hidden price hike.

“When you buy a shrinkflated product, you are likely buying an illusion and that illusion comes from over-packaging,” said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University.

“So that’s really a concern that I have with shrinkflation, I mean are we overpackaging our food now because companies are obsessed with the idea of selling us an illusion, a mirage, that the product hasn’t changed at all,” he said.

Charlebois thinks consumers should be aware of another manufacturing trick tied to inflation, one that has largely flown under the radar: the snack tax.

“A lot of people don’t know that there are hundreds and hundreds of products that weren’t taxed before, that are now taxed because they are sold in smaller portions.”

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There’s a unique tax situation called the “snack tax.” It’s not a separate tax but rather a classification issue. Certain food items, based on their quantity or how they’re prepared and packaged, can be categorized as “snacks” rather than “food.”

This distinction is important because “snacks” are subject to the goods and services tax (GST) or the harmonized sales tax (HST), while most “food” items are not. This means that if a product falls into the “snack” category, consumers end up paying more due to the added tax.

Although the department of Innovation, Science and Economic Development Canada (ISED) has funded several research projects to get to the bottom of the issue, consumers have yet to see any concrete measures taken to ease the burden on their pocketbooks. Earlier this year, the New Democratic Party tabled a bill in the House of Commons that, if passed, would establish a national framework to make food pricing more transparent by standardizing unit pricing and improving public awareness about shrinkflation.

The federal government also created a grocery code of conduct with the aim to increase transparency and fairness across the industry and make data on food prices more accessible to the public. This could have a positive impact on prices, though the code isn’t set to take effect until June 1, 2025.

In the meantime, caveat emptor — be wary of food companies that continue to eat into your grocery budget.

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