On Super Bowl Sunday, the White House released a short video in which a smiling President Biden, sitting next to a table filled with chips, cookies and sports drinks, criticized companies for reducing package sizes and portions of popular foods without led to a reduction price.
“I’m tired of what they call shrinkflation,” Mr. Biden declared.
The video caused a stir on social media and delighted a consumer advocate named Edgar Dworsky, who has been studying “shrinkflation” trends for more than a decade. He briefed Mr. Biden’s economic advisers twice, first in early 2023 and again a few days before the video aired. The first briefing seemed to be going nowhere. The second clearly expressed Mr. Biden’s new favorite argument in economic policy – that companies have used soaring prices to line their pockets by keeping prices high while giving consumers less.
The products featured in the president’s video, such as Oreos and Wheat Thins, were all examples of the shrinkflation that Mr. Dworsky had documented on his Consumer World website.
As inflation eases, shoppers remain upset about high food prices. Mr. Biden, whose popularity ratings have plummeted amid rising prices, has found a blame-shifting message in the middle of his re-election campaign that appeals so much to him: skewering companies for shrinking the size of candy bars, ice cream cartons and other food items while lowering prices increased or kept stable, even if companies’ profit margins remain high.
The president has begun accusing companies of “ripping off” Americans with these tactics and is considering new executive actions to crack down on the practice, administration officials and other allies say, although they did not provide specifics about the steps he is taking could undertake. He is also likely to criticize shrinking inflation in his State of the Union address next week.
Mr. Biden could also pass new legislation to empower the Federal Trade Commission to more aggressively investigate and punish corporate price gouging, including in grocery stories.
White House officials praised Sen. Bob Casey, Democrat of Pennsylvania, for reaching out to the president on the issue. Mr. Casey’s office released a damning shrinkage report last year that said about a tenth of recent price increases for snack foods and toilet paper were due to companies reducing the number of cookies in bags or sheets on a roll.
Mr. Casey has made the issue a focus in his re-election campaign, blaming big companies for price hikes that have made it difficult for consumers to afford sufficient quantities of essential items. “Some of it is really harmful,” he said in an interview. “You can’t wait a year to buy paper towels or boneless chicken or groceries or Huggies diapers.”
Liberal senators and some progressive think tanks in Washington urged Mr. Biden early in his term to blame corporate greed for the biggest rise in consumer prices in four decades. Senator Elizabeth Warren, Democrat of Massachusetts, accused the companies of burdening consumers as prices began to rise in 2021.
Some Democratic economists, including veterans of previous administrations like Harvard’s Jason Furman, have rejected claims that price gouging is responsible for inflation. Mr. Biden has only partially embraced the argument, selectively denouncing meatpackers and oil companies and speaking at length about other drivers of inflation, including supply chains that have been hit by the pandemic.
“It wasn’t as broad as some people would have liked,” said Bharat Ramamurti, a former economic adviser to Mr. Biden who nonetheless fielded angry calls from companies Mr. Biden called in 2021 and 2022.
Since then, Mr. Ramamurti said, polls have shown that Americans are angry about corporate price increases, including on food. Part of Mr. Biden’s shrinking strategy, Mr. Ramamurti said, “is to meet the public where they are and talk about issues that are really at the forefront.”
White House officials acknowledge the political dimension of the issue but say other factors are also driving Mr. Biden’s rhetoric. Administrative economists are concerned by companies’ persistently high profit margins, even as inflation cools; Food production costs have fallen much faster than food prices on store shelves over the last year.
Mr. Biden has spoken extensively to voters about food prices. And as he noted in his Super Bowl Sunday video, he’s an unabashed ice cream fanatic.
Progressives who pushed Mr. Biden to target companies sooner and more aggressively for price increases welcomed his new focus. Lindsay Owens, executive director of the liberal think tank Groundwork Collaborative in Washington, said in an interview that Mr. Biden’s comments were timely to help voters understand why food and other essential prices remain stubbornly high despite falling inflation .
“That part of the supply chain no longer resonates with people,” she said. “The shelves are full. When you try to explain the last mile, this is an important part of it.”
Mr. Dworsky said he was glad that Mr. Biden recognized the power of focusing on shrinkage.
“I found a good speaker,” he said in an interview. “I can’t think of too many consumer education topics that have reached this level.”
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2024-02-26 15:02:22
www.nytimes.com
