Do you often feel that the packet of your favourite potato chips has reduced in size? Or that your shampoo bottle emptied earlier than usual. Don’t worry, you are not the only one who thinks that there is a lesser quantity in the product in comparison to what it used to be. In economics, this phenomenon is termed ‘Shrinkflation’. You must have come across this word on social media recently. It is trending right now across the world.
Everything, right from grocery items to snacks, tissues, yoghurts and beverages, Shrinkflation hits them all. If you haven’t heard the term but can relate to the above-said problems, let us help you understand this.
What is Shrinkflation?
Let’s first understand what shrinkflation is and how is it affecting our pocket and make us spend more for the same quantity of product.
Shrinkflation is a clever tactic used by brands to reduce the cost of the product by downsizing the quantity of the product. It is a sneaky way for the brands to increase the prices of the product without actually raising the prices. In Shrinkflation, instead of raising the price, brands reduce the quantity of the same product to prevent customers from scaring off by the new prices. So in a nutshell, brands are selling consumers lesser products at the same price.
Experts believe that shrinkflation is a form of inflation that consumers are not supposed to see. But, recently consumers started noticing the change in the quantity of their products. Now their product comes in a lesser quantity than earlier. Since savvy consumers know how brands are sneaking the price rises under the mask of shrinkflation, they are creating awareness among other people of their purchasing behaviour.
Consumers Taking Notice Of Shrinkflation
You might be thinking if brands use this strategy to earn more benefits then it might not be something that started recently. It was always there. But the recent economic conditions led to changes in consumers’ buying behaviour.
With skyrocketing prices of almost everything, consumers are now becoming extra sensitive to higher prices. This is the reason why in the modern-day scenario, shrinkflation comes under the radar of the customers and not going unnoticed.
In addition to this, various media channels are also covering the practice of shrinkflation. Experts believe that over the years, companies used the shrinkflation for Cereals, snacks, coffees, tissues and ice creams to maintain their prices at a certain level.
According to the survey conducted by Morning Consult in the U.S, the top category affected by the shrinkflation includes Snacks, Pantry Items, Frozen Foods, Meat and Bread & Pastries. Reacting to shrinkflation, consumers experience a shrinking of pack sizes of 51% in chips, 37% in cereals, 29% in candy bars and almost 26% in toilet papers.
Responding to the higher prices, 38% of the consumers are shopping less frequently and 43% of the consumers are buying less than what they used to. Some consumers are opting out to buy things that are not essential and 50% of the shoppers have switched to brands with lower prices to save money.
Effect Of Inflation Comes Into The Picture
Due to rising inflation, the prices of food, gas, rent, fuel and every other thing are witnessing a sharp spike. And to cope with these rising prices, companies practise shrinkflation and deceive customers into believing that despite the rising prices there aren’t any changes in the product of their company. To maintain the profit margin along with their customers, brands shrink the packet sizes of the product. While consumers remain unaware of the concept of shrinkflation, companies keep making huge profits by reducing the quantity of their products.
But now the times have changed and consumers are getting aware of the companies’ sneaky strategies and expressing their shrinkflation-related outrage openly. Yelp Economic Average reports in their recent survey found out that for the very first time, consumers are mentioning the word shrinkflation in their reviews posted on the website.
Keeping the change under the radar, apart from downsizing the quantity of the products, companies use other alternatives also. To prevent the price hike of a product, companies often rebrand their packaging or reformulate the ingredients of the product. For instance, you all must remember that earlier Dairy Milk chocolate used to come with golden foil inside its outer wrapper. Now, the gold foil is missing from its packaging. This is how companies find other alternatives to save expenses.
The trick of shrinkflation appeals to brands because the small details go unnoticed by the customers without harming their image and for that matter, their profit margins too. Edgar Dworsky (Consumer Advocate & Founder of Consumer World) indicates that shrinkflation is something that won’t disappear even in the future. Inflation or no inflation, Shrinkflation will continue to haunt the customers.