Fewer nuggets, smaller salads: Shrinkflation hits American restaurants
Do you feel a little cheated when you look at your plate? It’s not just a figment of your imagination – portions in American restaurants are indeed getting smaller and smaller. Call it shrinkage: when the sizes go down, but you pay the same or sometimes more for the meal or product.
American restaurants are in the same boat as the rest of the country, battling soaring food and fuel prices that recently helped push US inflation to its highest level in 40 years. Restaurants have also increased their prices. Government data on Wednesday showed out-of-home food costs rose 7.2% over the past 12 months. But now restaurateurs are starting to worry about how much more they can raise the tab before diners start to balk, especially for something that’s considered an optional expense.
So companies are instead coming up with behind-the-scenes strategies to cut costs, hence the declining shares. At Subway restaurants across the United States, roast chicken wraps and sandwiches contain less meat. Domino’s Pizza has reduced boneless wing orders from 10 pieces to eight, and diners at Burger King will see the same reduction for their nugget meals. Salsa side cuts get smaller at Salsarita’s Fresh Mexican Grill. And in Southport, North Carolina, Gourmet to Go’s 1-pound salads are now 2 ounces lighter.
“Yeah, that’s the ongoing inflation,” said Carolyn Gherardi, owner of Gourmet to Go, a small, one-story store with a porch and a yellow door that offers customers “homemade” meals to go. For now, she is keeping the price of these salads at $6.95.
“We try to keep the cost the same, but in essence it’s less value,” she said.
Restaurants are betting that consumers won’t be bothered by a few fewer fries, or a little less topping on their sandwiches so much that they’ll complain about seeing yet another price hike. It’s a strategy that tends to work because of how our brains calculate — or don’t calculate — change, said Nailya Ordabayeva, a marketing professor at Boston College.
“People tend to underestimate changes in object size,” she said. “It’s quite convenient for companies to change size, change size, more than they do price, because people notice price changes more.”
Astute grocers will know that shrinkage is nothing new. Going down to smaller sizes is an age-old technique for dealing with tighter margins, especially for packaged goods manufacturers. But food prices are rising so rapidly right now that the practice is becoming widespread, hitting restaurants and supermarkets.
In February, non-dairy cheese maker Daiya Foods ditched its 8-ounce (227-gram) package of vegan shreds to make way for a slightly different product that weighs just 7.1 ounces. Gatorade made a similar decision, recently removing its 32-ounce bottles to sell only its 28-ounce version. Consumers on the r/shrinkflation subreddit posted photos of examples like smaller bags of chips, shrinking bars of soap, and lighter lotion bottles.
Even your toilet paper is not safe. Speaking to AARP, Edgar Dworsky, founder of Consumer World, said big brands have reduced the number of sheets that come on a roll.
Sometimes companies attribute changes to things like supply chain issues or even consumer preferences. Gatorade, for example, explains that part of the reason for the bottle’s small size is that it’s easier to grip. Subway said the discounts for rotisserie-style chicken sandwiches “reflect our continued evolution to improve our offerings and are not in response to inflation.”
Consumers suspect foul play, assuming restaurants aren’t straightforward. According to a survey commissioned by MarketMan, about 56% of American diners say they would be more willing to pay a little extra if restaurants clearly explained why prices were rising.
In addition to smaller portions, restaurants are also taking other steps to combat rising costs, such as replacing regular protein with smaller cuts.
When Salsarita’s COO heard about the nearly 26% price hike coming for the steak, it was too much to stomach. The company went with a less expensive cut of beef, choosing to use a ball-tip steak instead of a tri-tip. The exchange brought that increase down to around 22% – still a staggering jump, but a bit easier on the mostly franchise chain of 85 units. Now the company alternates discounts, depending on what’s available and what’s cheaper.
“I feel like we got pretty lucky because part of that conversation was, ‘Are we taking that raise? Or do we sit down and take the steak off the menu? said COO Merrick McKinnie. “We were able to reduce that cost by saying we’ll use one or the other.”
The Charlotte, North Carolina-based chain also turned a supply chain problem into a cost-cutting solution. After struggling to get the standard 4-ounce plastic cups he uses for servings of salsas, queso and sour cream, restaurants often use 3.5-ounce versions instead. The half-ounce reduction doesn’t bother customers, and now the company is considering a permanent downward shift, McKinnie said.
“In a perfect world, if there’s a 4-ounce and a 3.5-ounce, we’ll move to a smaller format,” he said.
At J. Alexander’s, a chain of about 20 steakhouses, the filet mignon toppings used to be thrown away, but now chefs are chopping up those extra pieces of beef to make cheeseburgers. They also put them in other newly created dishes such as carne asada tacos, “because of inflation,” said general manager Jim Mazany.
“Today we really use all that stuff,” Mazany said.
Consumers should see more contractionary and cost-cutting measures in the coming months, as price pressures aren’t going away any time soon. The US Department of Agriculture now expects retail food prices to rise 5-6% this year, about double its forecast from three months ago.
Bryan Stotland, a 53-year-old from Chicago, says he notices smaller portions mostly at grocery stores, but also for entrees at sit-down restaurants. “It’s like $20 for an appetizer and $32 for a main course, and they’re pretty close to the same size. So in that sense the portions have gone down.
“Sometimes I get a little frustrated,” he said. “But I guess it’s like the economy is messed up, and you understand.”