Shrinkflation Will Hit Hispanic Pocketbooks Hardest

If the past two years has taught us anything, it’s that change can happen in an instant. With so much uncertainty month after month, we all seem to be like the little hamster in the clear plastic ball scampering frantically -- only to run into a seemingly endless series of obstacles at every turn. 

Hispanic households have been disproportionately hit by these obstacles. From higher unemployment rates at the start of the pandemic to higher COVID infection rates -- especially among essential worker households -- to virtual learning at public schools in areas with poor internet access, it’s been just one bump after another.

The latest? “Shrinkflation” and “stagflation” at the same time!

Shrinkflation is when packaged goods companies decrease the amount in a package but keep the price the same. We were already seeing this trend before the pandemic, when we would buy a pound of coffee — which should be 16 ounces — to discover that the package was actually only 14 ounces.



“Stagflation” is when prices go up, and economic growth is slow or flat. This trend has been building momentum over the past six to eight months.

Hispanics will be greatly affected by both, as they typically have larger households. And of any ethnic group, Hispanics spend the largest percentage of income -- over 14.5% -- on food. While the business headlines have focused on gas prices since Ukraine was attacked, the reality is that food-at-home costs have increased about 3.8% year over year (2020-21). Many household necessities are costlier than this average, especially beef (up over 9%); pork (up over 8%); fresh fruits and seafood (up over 5.5%); poultry (up 5%); and the list goes on (eggs, sugar, non-alcoholic beverages, and cereal).

Hispanics are household-spending dynamos juggling higher food costs, along with larger spends on clothing and baby items. Marketers who “take care of” this segment will stand out. Family-sized offerings are key to maintaining the loyalty of this consumer, who is budget-conscious and often has more mouths to feed. Retailers who feature products that offer the real value versus the shrunken value will also stand out as trusted places to shop. Economy size goes a long way for Hispanic households.

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