Shrinkflation in America: GAO’s Findings on Trends, Consumer Behavior, and Policy Options

In July 2025, the U.S. Government Accountability Office (GAO) released a comprehensive analysis of product downsizing—commonly known as “shrinkflation”—in response to congressional concerns about rising consumer prices and subtle packaging changes. The report, Consumer Prices: Trends and Policy Options Related to Shrinking Product Sizes (GAO-25-107451), examined how often downsizing occurs, its impact on inflation, how consumers react, and potential policy measures to improve transparency.

GAO defines shrinkflation as the reduction in the quantity of a product without a commensurate price drop, which results in a higher per-unit cost. Reviewing Bureau of Labor Statistics (BLS) and retail scanner data from 2015 to 2024, GAO found that while downsizing is a longstanding practice, its contribution to overall U.S. inflation was minimal—only about 0.06 percentage points of the 34.5 percent increase in consumer prices from 2019 to 2024. However, certain categories such as household paper products, snacks, and breakfast cereals experienced more pronounced effects, with downsizing contributing 1.6 to 3.0 percentage points to inflation in those areas.

The study noted that less than 5 percent of items in seven examined product categories—coffee, cereal, paper towels, toilet paper, laundry detergent, toothpaste, and pain relievers—were downsized between 2021 and 2023. Yet, these items often represented a disproportionately large share of sales, indicating that popular products were more likely to shrink. Coffee experienced the highest per-unit price increase from downsizing (32.4 percent), while paper towels had the broadest impact in terms of sales share.

Consumer behavior emerged as a critical factor. GAO’s review of 17 studies and stakeholder interviews revealed that buyers are generally less responsive to downsizing than to equivalent price increases. Subtle packaging changes, infrequent purchases, and brand loyalty often dull consumer awareness and response. For example, one study found that a 1 percent drop in product size could slightly increase sales volumes, suggesting that many shoppers either fail to notice or accept the change. Higher-income households were found to be less sensitive to downsizing, likely because essential goods represent a smaller portion of their budgets.

Policy responses in other countries provide possible models for U.S. lawmakers. France and South Korea have enacted requirements for retailers or manufacturers to label downsized products, though enforcement and consumer engagement present challenges. Unit pricing—displaying the price per standard measure—has been shown to help consumers detect and respond to downsizing, but U.S. practices are inconsistent across states. Expanding uniform unit pricing requirements nationwide could improve price transparency but would raise enforcement and resource considerations.

GAO also highlighted the potential for using retail scanner data to better track product size changes in the Consumer Price Index. This approach, already in use in several countries, offers more comprehensive and timely coverage of size changes but would require data-sharing agreements, technical infrastructure, and specialized staff. Other policy ideas include consumer education campaigns, as implemented in Canada, and legislative bans on certain deceptive downsizing practices, as proposed in Germany and the United States.

Ultimately, GAO’s findings suggest that while shrinkflation is not a major driver of overall inflation, it can significantly affect prices in certain product categories and erode consumer purchasing power over time. Any policy aimed at mitigating its impact will need to balance transparency, enforcement feasibility, and the potential effects on manufacturers’ flexibility and consumer choice.

Disclaimer: This blog post summarizes findings from GAO-25-107451. It is provided for informational purposes only and does not constitute legal, financial, or policy advice. While care has been taken to ensure accuracy, readers should consult the original GAO report for complete details.