Talking about the Flations! GREED/STAG/SHRINK-FLATION

Talking about the Flations

Greed/stag/shrink-flation

Greedflation is, in theory, where companies raise their prices in industries where inflation hasn’t been that significant. This is an opportunity for companies to raise their prices unnoticed because otherwise consumers would get confused at the different rates of inflation.

The indicator for greedflation not being a real thing is healthcare prices. These prices typically go up higher than the rate of inflation. In the past year, healthcare prices have been lower than inflation.

The reason it’s political is because they’re trying to pass bills that cap how much corporations can charge.

Shrinkflation is when companies keep prices the same, but they’ll put less into the packages. A 10% product size shrinkage is equivalent to an 11% price increase. The best way to keep your eye on shrinkflation is to look at unit prices. With half of all grocery purchases being unplanned, there’s a lot of money being paid where it doesn’t need to be.

Some ways to find shrinkflation:

If you buy store brand versus name brand, they’re typically the last to reduce their content. Also, compare price per ounce instead of grabbing the first item you find.

Stagflation is when we have persistent high inflation, combined with high unemployment and a stagnant demand for employment.

 

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