Another Example of Brutal Inflation
If you just look at the price change, toilet paper price inflation looks like it's 3% YOY. But as we can see when you pay closer attention to unit metrics, the real rate is considerably higher.
It's been a few months since I've really gone in on inflation. There are a couple of reasons for that. The biggest reason is I just think the hypothesis has clearly been proven and beating a dead horse on a regular basis isn't necessary anymore. If you shop for groceries regularly, you already know prices are moving up quickly. Back in May I shared an example of personal price inflation that I had been experiencing. That rate was 7.9%. At the time, that number may have caught some by surprise, but it certainly shouldn't now. For those of you who have been following the site for a while, you may recall my piece titled "The No Inflation Myth." That one was written in Summer 2020. If you haven't read it yet. Please do it.
A big focal point of that article was that despite what the powers that be tell us, high inflation has been normal for a very long time. And we can prove it when we measure price in very specific unit metrics. When we price things by the ounce rather than by the "box" or the "package," we can see how bad inflation actually has been. I'm of course talking about "shrinkflation." Today I want to revisit shrinkflation again because I found another example of shrinkflation at Costco this week and the rate is even beyond what I've imagined what true inflation probably is.
Notice anything? Aside from the fresh new packaging appearance, the old package had 45 more sheets per roll. The previous package was purchased in October 2020 for $16.49. The new package was purchased this week (September 2021) for $16.99. You get five of these 6-roll bundles per package for a total of 30 rolls. When we divide the price by the square footage of each package, we get the price per square foot. This is our true unit cost. Last year, Costco's toilet paper cost 1.034 cents per square foot. It currently costs 1.192 cents per square foot. Inflation rate? Just under 15.3%. If you weren't paying attention to the square footage and just payed attention to the 50 cent price hike of the packaging, you'd probably think inflation is just 3%. Neat trick, huh? They have been doing this to us for years.
This specific lesson also proves that just saving receipts might not actually be enough to accurately measure your own true rate of inflation. You have to take pictures of everything. Short of that, make a documented note of unit pricing. You can track this overtime and see how much more expensive it is for you just to live your life. Also, you should be mad about this. This isn't normal. This kind of egregious consumer price inflation is a direct result of Federal Reserve monetary policy and fiscal spending policy out of Washington. Get mad.
I am getting mad!