In an address to the American public before the Super Bowl showdown, President Joe Biden took the opportunity to slam American food and beverage companies for a phenomenon known as “Shrinkflation,” which Biden says is taking the American people for “suckers.”
Food and Beverage Industry Challenges
Companies in the food and beverage industry in the U.S. have been adapting to the impact of rising costs in recent years, which President Biden slammed as a “rip-off.”
Economic Impact of Shrinkflation
In an attempt to save on manufacturing costs when companies face inflation, businesses resort to “shrinkflation,” reducing product sizes without adjusting prices.
Examples of Shrinkflation
Products like Double-Stuffed Oreos, Gatorade, and Walmart’s paper towels have experienced size reductions while prices rose, exemplifying shrinkflation.
Economic Impact of Inflation
The U.S. economy witnessed a peak in inflation at 9.1% in June 2022, which President Biden addressed during his Super Bowl speech before the Kansas City Chiefs’ dramatic victory in overtime against the San Francisco 49ers.
Biden’s Address to the Nation
“It’s Super Bowl Sunday – if you’re anything like me, you like to be surrounded by a snack or two while watching the big game,” Biden said in a video address posted online prior to the “greatest show on turf.”
Less Snacks, Same Price
“You know, when buying snacks for the game, you might’ve noticed one thing, sports drinks bottles are smaller, bag of chips has fewer chips, but they’re still charging us just as much,” Biden revealed to the nation.
Biden Hits Out at “Shrinkflation”
“As an ice cream lover, what makes me the most angry is that ice cream cartons have actually shrunk in size, but not in price,” Biden said, “I’ve had enough of what they call ‘shrinkflation.’”
Companies “Pulling a Fast One”
Biden called out the shrinking of food products, which he’s branded as “shrinkflation,” saying, “It’s a rip-off. Some companies are trying to pull a fast one by shrinking their products little by little and hoping you won’t notice. Give me a break.”
Federal Reserve’s Response
The Federal Reserve hiked interest rates in response to inflation, which enabled a slight decrease for the first time in three years.
December Inflation Rates
By December, the year-over-year inflation rate had decreased to 3.4%, albeit remaining above the Fed’s 2% target rate.
Central Bank’s Dilemma
The persistently high inflation led the central bank to refrain from cutting interest rates until the rate drops further.
Biden’s Intense Belief
“The American public is tired of getting played for suckers. I’m calling on companies to put a stop to this. Let’s make sure businesses do the right thing now,” Biden said in his closing statements of the address.
Special Counsel’s Report Release
Special Counsel Robert Hur released a report addressing President Biden’s retention of classified documents after his vice-presidential tenure.
Inflation’s Lingering Effect
While inflation has decreased, essential prices remain high, and food products remain smaller, causing frustration for Americans who consistently get less for their money.
Mixed Economic Indicators
Despite positive economic indicators, many Americans perceive Biden’s policies as worsening economic conditions.
Public Perception of Biden’s Policies
Although inflation declined, a recent poll revealed that 55% of Americans believe Biden’s policies have negatively impacted economic conditions, contrasting with 26% who think conditions have improved.
Senator Warren’s Criticism of “Shrinkflation”
Senator Elizabeth Warren believes, “When companies shrink product sizes without adjusting prices, it’s a sneaky way to pass on hidden costs to consumers. We need transparency and fairness in the marketplace.”
Senator’s Report on Shrinkflation
Senator Bob Casey’s December report highlighted shrinkflation’s real impact, noting size reductions in household items with unit prices increasing over 20%.
“There is no denying that shrinkflation is real and that it is having a measurable impact on family budgets,” Casey admitted.
President’s Call to Action
Biden’s address to the nation before the Super Bowl shows the President is aware of the effects that shrinkflation is having on families, but also the divide between the government and America’s food and beverage industry.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.