For those who have not heard the term ‘shrinkflation’ before, it is the practice of reducing the size of a product while keeping the price the same. From the outside, it seems as though you are getting the same old product for the same old price, when really you are getting less bang for your buck. For example, Kleenex recently lowered the number of tissues per small box from 65 to 60, while Dominos reduced their chicken wings from 10-piece to eight.
It doesn’t matter where you live in the world, and it doesn’t matter whether you are shopping for yogurt, chips, chocolate, or soap – you have likely come across shrinkflation numerous times, even if you haven’t noticed.
While the concept and application of shrinkflation is not new, it is currently on the rise – a trend we normally see during times of inflation. With companies struggling to maintain their bottom line due to increases in prices for ingredients, logistics, employees, and packaging, shrinkflation is often seen as a go-to method to keep the ship steady. In May 2022, inflation was estimated to have risen by 7%, which experts at S&P Global expect to continue until September.
Edgar Dworsky, former assistant attorney general and shrinkflation expert, has explained the reasons behind why companies choose to shrink their products. Manufacturers allegedly realize that customers are much more likely to notice a hike in prices than they are a reduction in size or weight. For example, if you make a Mars bar 10% more expensive, people are likely to notice. Whereas, if you make a Mars bar 10% smaller but keep the price the same, the consumers are less likely to complain.
The deception doesn’t stop there though, as companies employ a number of tricks and misdirects to pull the wool over consumers’ eyes. These include coming up with new packaging, labels, and slogans to draw the shopper’s attention away from any physical change to the product. For example, if you call a bag of sweets ‘party size’, it makes it sound bigger and better value for money, even if there are fewer sweets inside than before.
Sometimes, companies choose to announce their changes, whether it be in price or size/weight. However, they often adopt far sneakier tactics. For example, shrinkflation often happens in rural areas of India because the population are less wealthy and, therefore more price sensitive.
Although it is rare, the shrinkflation trend can sometimes reverse into upsizing, when companies are forced to lower their prices due to competitors undercutting them. However, Dworksy has revealed that once a product shrinks, it very rarely grows again. So once your Kleenex box drops to 60 tissues, even once the period of inflation ends, it is unlikely to return to 65.
Companies all over the world are dealing with increased supply chain costs, labour shortages, and higher material costs, but the shrinkflation trend also revolves around a sense of deception from those at the top, rather than transparency, honesty, and fairness.
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