09 June 2021

Shrinkflation and a New Tool to Track Price Inflation in Real Time

Consumer prices are rising rapidly these days. Just last month, we found the discounted sale price of Campbell's Condensed Tomato Soup had risen to $0.96 per can, a rise of 13% above pre-pandemic levels.

One reason we track the price of Campbell's iconic tomato soup because the product itself has proven to be remarkably stable over time. If you stepped into a time machine and traveled back to nearly any point in time from January 1898 to the present, you could likely find the same 10.75 ounce size can of condensed tomato soup stocked for sale in American grocery stores.

That makes Campbell's iconic soup unlike other products, whose producers engage in a market tactic called shrinkflation, where they keep the sale prices the same, but shrink the size of the goods they sell. If the phrase sounds familiar, it is because the topic is increasingly popping up in the news.

There are lots of reasons for companies to engage in shrinkflation, but the end result is the same. You get less stuff for the same amount of spending. Whether its toilet paper, cat food, or packages of Hershey's chocolate kisses.

Things that don't change don't have that option. Unlike these other kinds of products, they cannot get away with shrinking the amount of goods inside their packaging. Because these goods cannot get smaller, producers are forced to pass along their higher costs from the escalating prices of the things they have to buy, which consumers see as rising prices. That difference makes these goods very useful for keeping track of how inflation is affecting your personal finances.

Speaking of which, keeping track of those price changes can be a time intensive activity. When we track Campbell's tomato soup prices, we review dozens of weekly ads to identify the prices at which retailers are selling them each time we update our database of monthly price data for the product. Our price database for Campbell's tomato soup extends back to January 1898.

With prices now escalating rapidly enough to become a regularly featured news topic, we were excited to find that Microsoft has introduced a new capability into its Edge web browser, which makes it easy to track the recent price history of products like Campbell's Condensed Tomato Soup. Here's the announcement from the rollout of Microsoft Edge's price history tracking capability:

Before making a purchase, I like to make sure that I’m getting the best deal possible. Because prices on certain items fluctuate over time, knowing when to buy can make all the difference. This is why I’m excited to share that, this month, Microsoft Edge is releasing a new feature called price history.  It shows me historical online prices to help me decide if I should wait a few days before making a purchase. To see an item’s price history, all you have to do is click on the blue tag in the address bar. Learn more about which retailers are supported. This is just another way we’re helping you save time and money.

In our case, it provides a very easy way to track recent price trends for our favorite inflation-tracking product! Here are two snapshots of what we found when we looked at its price history on 28 May 2021 and again, 10 days later, on 7 June 2021.

Shopping in Microsoft Edge: Campbell's Condensed Tomato Soup Price History, Snapshots on 28 May 2021 and 7 June 2021

Recognizing that we're looking at a limited sample of just three large retailers (Amazon, Wal-Mart, and Target), it's interesting to see the historical prices that MS Edge reports over the past month generally agree with what we've documented using our well-established tracking methods.

Obviously, there are more consumer goods than just Campbell's Tomato Soup to consider in assessing how fast inflation is growing in the U.S. At this writing, Microsoft Edge's price history tool pulls its data from products sold at eight large retailers, including Amazon, Wal-Mart, Etsy, Macy's, Nordstrom, Home Depot, Target, and Best Buy.

If you have Microsoft Edge, check out its price history tracking capability out for yourself by picking out a basket of goods and watching their price changes over time. If nothing else, you might get a very good idea of how today's inflation is directly affecting you and your quality of life.


Bonus update! Campbell Soup (NYSE: CPB) is reporting its previously projected profits will be negatively impacted by rising material and transportation costs. That confirmed upward cost pressure will make it less likely for significant discounting of tomato soup prices in the next several months, even as demand declines to its seasonal low.