A new study led by a University of Massachusetts Amherst economist shows that shrinking package sizes at U.S. grocery stores have played a hidden but important role in food inflation—though not in the way many consumers may think.

The research, published in the International Journal of Industrial Organization, found that the average size of packaged food declined by 14.6% between 2012 and 2019. These changes added nearly four percentage points to measured food inflation over the period. Though the analysis period does not cover well-documented COVID-era price spikes due to data inconsistencies, the paper suggests the trend either continued or accelerated during the pandemic.

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“Our inflation calculation measures how much more costly life is if consumers didn’t pay attention at all to product sizes,” explains lead author Christian Rojas, professor and chair in the Department of Resource Economics at UMass Amherst.

Rojas and co-authors Edward Jaenicke of Penn State University and Elina T. Page of the U.S. Department of Agriculture make a clear distinction between “shrinkflation”—when an existing product quietly reappears in a smaller package at the same price—and what they call “shrinkage”—the steady introduction of new, smaller products replacing older, larger ones.

“Shrinkflation is not a widespread phenomenon, but it’s been widespread in the media,” Rojas notes.

True shrinkflation—the downsizing of a continuing product—was relatively rare. The study found that fewer than 0.5% of products in the data fit this definition. What really drove the decline in package sizes is product turnover, with new, smaller products entering the market.

Using national retail scanner data, the research compares inflation calculations that did and did not adjust for size. When size was omitted, inflation appeared lower. Over the seven-year span, failing to account for shrinking packages would have understated food inflation by 3.7 percentage points.

The study found that shrinkage is more common when consumers are less able or less likely to notice. It was most pronounced among products purchased by higher-income households, in states without unit pricing laws, in sugary foods such as candy and soft drinks, and in smaller, less bulky packages, which are easier for consumers to overlook.

In contrast, bulk and discount retailers were more likely to sell larger packages over time, suggesting their customers are more sensitive to value per unit.

“Shoppers making quick, incidental purchases—such as at convenience stores—may pay less attention to per-unit costs or package sizes than those planning larger trips to warehouse clubs,” the researchers write.

They suggest that mandated per-unit pricing regulations may help consumers make smarter buying decisions and combat inflation. Only nine states currently have mandatory unit pricing laws.