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I heard about this on Marketplace Morning Report yesterday, and thought it was interesting. Kellogg's is shrinking the box size of several of its brands of cereal. They aren't, however, planning on reducing the price accordingly.
Apple Jacks, Cocoa Krispies, Corn Pops, Froot Loops and Honey Smacks will all be about two and a half ounces lighter starting this month. According to the LATimes, the effective price increase is intended to offset rising production costs. The cereal maker wouldn't say of they have plans for similar treatment of other cereals, but I wouldn't be surprised.
I totally understand that prices on everything are going up and that companies have to pass that on to the consumer. I'm just amused by the clever ways in which companies accomplish that.
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6-19-2008 @9:13AM Jon said... Smaller boxes mean more waste, more trips to the store, and higher shipping costs for the cereal. Why wouldn't Kellogg's just increase the price per box but keep the size the same? The cost to the consumer would be the same either way.
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6-19-2008 @9:38AM NYCubsFan said... This happens constantly. I found the canned tuna at Trader Joe's has gone from 6.5 ounces to 6 ounces. It was only noticeable because they had the old and new cans mixed together.
What cereal companies should do is reduce the physical size of the box. Most are way oversized to serve as billboards in the store. Less cardboard will lower costs and reduce waste.
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6-19-2008 @9:48AM Astin said... This has been common practice for a long time now. Bags of chips, chocolate bars, cereal boxes, and countless other packaged products are regularly reduced in size/weight in order to maintain the "low" prices. Once the size shrinks too much, they'll often bring out a "giant" sized version for a higher price.
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6-19-2008 @9:49AM Astin said... This has been common practice for a long time now. Bags of chips, chocolate bars, cereal boxes, and countless other packaged products are regularly reduced in size/weight in order to maintain the "low" prices. Once the size shrinks too much, they'll often bring out a "giant" sized version for a higher price.
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6-19-2008 @3:32PM Michael Schmitt said... Astin is right; it is a way to pass on the cost of the product without changing the price. The American psyche, from a marketing standpoint, wants MORE for its money, but doesn't want to spend MORE than what they are currently paying for a particular product, so a same-box-bigger-price thought process isn't accepted by the general American public, but a smaller-size-same-price is the lesser of these two evils.
Wal-Mart does this a lot. You'll see your favorite garbage bag's price remain the same, but the amount of garbage bags associated with the SKU slowly gets smaller and smaller over time. You are better off going with a price per unit process, but even then, retailers don't make it easier on you, even though they often give this type of information to you on the shelf price tag. Just try and compare Coke in a 6-pack and Coke in a 2 liter bottle; you'll see the 6-pack price per unit is in ounces and the 2 liter bottle is for the bottle or in mL, not ounces. Most people just keep buying...
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6-20-2008 @12:49AM Leigh said... From a very young age my dad taught me to keep an eye out for this type of price change. He still complains about how you used to go to buy a "pound of bacon" and actually get a pound. Well people still say "We need a pound of bacon", but the plastic package they buy at the store only has 12oz in it, that's 25% less bacon. Prices didn't go down, but the quantity sure did.
Name-brand cereals were already painfully expensive. This only makes it worse.
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