Reply #15: Now add in these costs too [View All]

[Sydnie]

When a company downsizes a package, it must retool all of their machines to comply to the change. A packaging change not only means retooling to accommodate the new package shape and size, it also means redesigning the label to make it appear to be the same as before on the new size, further helping the consumer to blindly purchase the product without noticing the change in package size. Then, you have a work force that visits the majority of the stores that sell the product to assure that the old product is fronted (so it disappears from the shelf quickly) and the new product is in place behind so that the products can cycle through to the new label and packaging quickly. Even though warehouse's might be visited, many products are not returned to the manufacturer due to a package change, but are rotated quickly or marked down for quick sale to remove them from the shelves as quickly as possible.

So there is a cost involved in changing a package size that runs from the factory floor, through the advertising department, through the retail sales floor, all done in hopes that you won't notice that a pound of pasta is now only 12 ounce.

Ice cream is a great example. The containers went from rectangular to tapering in hopes that your eye would be deceived.

Cereal is another good example. In an attempt to compete with WalMart, many chains have forced the big cereal companies to lower their wholesale prices for all sales, not just to mega-buyers like WalMart. Even lower prices were not enough to help the chains compete with WalMart so less product is now being carried by many major chains, less selection. Rather than have their cash tied up in flavor/brand options, the stores have merely dropped the number of products they carry in total, removed a shelf from the section (from 4 shelves of products to choose from to 3 shelves of products, with just more facings of the same product and higher stacks of those products too) and hope that you don't lose a sale completely because you no longer carry someone's favorite breakfast cereal. Many chains have now started to limit selection in an attempt to not have their cash tied up in back stock and having more and more of the same product displayed instead. Cereal alone has lost 25% of their selection in most major chains across the country.


And, of course, those costs get passed on to us as well because the price is never lowered to reflect the product packaging change, even one the initial cost of making such a change has been repaid.

Sucks to be us for sure.