Keeping Prices from Climbing Too High (Vendor Options to Know About)

Let’s face it, prices are going up in the stores (both brick and mortar and online). The good news, though, is that they’re not climbing as fast as they could be. The question is: “Why not?” The answer: “How should I know? But I can hazard a guess.”

This all came up over a box of tissues. We tend to keep a lot of facial tissues on hand for when allergy symptoms kick in. A box of 200, which normally lasts a few months, can be gone in a couple of hours. No exaggeration here! The other day, I pulled a new box out of storage and got the distinct impression that it seemed smaller. Hm…

I found an older box in another room and put the two side by side. Yep, the new box was smaller, a half-inch shorter (all other dimensions were the same). Looks like vendors are holding down price increases by reducing package sizes. At least, that’s my hypothesis here.

I will extend my hypothesis to other items on the store shelves and to the reduction of content weight as well as package sizes. That box of cereal or crackers could have a net weight of an ounce less than it did a few months ago. The jar of peanut butter could contain less of that peanutty creamy goodness. Etcetera etcetera etcetera.

For you tea lovers, this could mean that your teabag contains a tad less tea or that the tea tin now holds 7.75 ounces instead of 8.0. I’m not saying they do, but it’s something to look out for as a smart consumer.

The reason vendors go the route of reducing package sizes and/or amount in the package is to keep from shocking you at the checkout counter. In reality, though, you pay a considerably higher price than you think you do because you are getting less product.

For example:

OLD – 2 ounces of oolong for $5.00
NEW – 1.8 ounces of oolong for $5.25

When you look at this as a per ounce cost, here is what you are really paying:

OLD – $2.50 per ounce
NEW – $2.92 per ounce (so a 2-ounce package should cost $5.84)

That’s a real increase of 84 cents, where 59 cents is hidden by the reduced package content amount. The vendor is thus able to charge what he/she needs to cover higher expenses at their end (including a U.S. dollar that is worth less now than it was a couple of years ago) without turning away customers by increasing the price by the full amount needed.

Looked at this way, the smaller package isn’t so bad. It keeps some tea vendors around and supplying those really special teas while being able to earn enough to make it all worth while.

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