How does 'shrinkflation' affect consumer purchasing power?

Shrinkflation is when companies make products smaller but keep the price the same, which means your money doesn’t go as far as it used to.

Imagine you have a bag of candy that used to have 20 pieces for $1. One day, you see the same bag, still priced at $1, but now it only has 15 pieces inside. That’s shrinkflation, the company made the product smaller (or "shrunk" it), so even though you paid the same amount, you got less candy.

When companies do this, it feels like your purchasing power is shrinking too. Purchasing power is how much you can buy with the money you have. If you used to get 20 pieces of candy for $1 and now only get 15, it’s like your money has become weaker, it buys less than before.

This happens a lot with things like cereal boxes, soap bars, or even soft drinks. Companies might make the box smaller but keep the price the same, so you still have to pay full price for something that doesn’t fill up your tummy as much anymore. It’s like getting a smaller toy in a bigger package, it tricks you into thinking you got more, when really you got less!