Inflation hidden in higher unit costsPosted: November 11, 2010
In this short post, Fortune provides a detailed diagram showing how companies have held product prices steady but have shrunk toilet paper rolls to cover the higher costs of pulp and shipping. In other words, the per unit cost (square inch of toilet paper) has increased, but this increase is not reflected in the final price, but in the lower amount of product provided at that price. This is a common tactic to disguise the inflated price of a good to maintain the appearance of price competitiveness. Just one more way in which an apparently benign pricing environment is actually sitting on top of roiling pricing pressures.