I came across an interesting article on “shrinkflation isn’t a trend, it’s a permanent hit to your wallet” by Alexis Benveniste for BBC that holds relevance for many especially those of us who are trapped in the lower income bracket.
At first glance, shrinkflation may seem like a minor inconvenience, a mere adjustment in packaging size. However, the implications run far deeper. With each reduction in size, poor consumers who generally live check-to-check find themselves paying more for less, their hard-earned dollars stretching ever thinner. In short, shrinkflation is a huge issue for them. Well, to outsmart shrinkflation, invest wisely.
Here is a section:
Products are getting smaller, and you’re paying the same. The problem won’t go away, even if the economy rebounds and inflation abates.
If you’ve noticed you’re getting less while your bill at the till stays the same, it’s not just you.
Shrinkflation reducing a product’s size or quantity while keeping its price stable is rampant. As the global economy grapples with issues including rising raw material costs, supply chain backlogs and higher post-pandemic labourer wages, consumers are bearing the brunt of spiking production expenses.
Whether it’s toilet roll or a bag of crisps, the practice, which mostly happens during times of inflation, is showing up in shops around the world. Last week, French supermarket Carrefour put stickers on products to warn consumers when a packet’s contents have gotten smaller without a corresponding price decrease.
Consumers are taking note of the shift to smaller packaging and, naturally, they aren’t happy, especially as their purchasing power is already falling amid inflation. Yet as uncomfortable as the sticker shock is now, a longer-term problem looms large: past manifestations of the phenomenon show the story of shrinkflation doesn’t end when inflation does.
In terms of consumer frustrations, “they notice price increases more than they notice size decreases”, says US-based Mark Stiving, the chief pricing educator at Impact Pricing, an organisation that educates companies on pricing. As a result, he says, companies use shrinkflation to raise prices “less painfully”.
Cammy Crolic, an associate professor at University of Oxford’s Saïd Business School, who focuses on consumer behaviour, agrees. Because consumers are so focused on how their purchases are affecting their wallets, she says, they are “more likely to notice the increase in price than the amount of product lost when packages shrink”.
Consumers don’t always see the changes right away; often, they are incremental. For instance, a favourite drink that may have come in a 12oz (340g) bottle a year earlier may now be offered for the same price, yet downsized to 10oz (283g) now.
And experts say that once the new sizes are on the shelf, they are likely to stay that way. Phil Lempert, food industry analyst and editor of SupermarketGuru adds that, since shoppers don’t have a choice, they have to adapt to the changes.