Introduction
Food companies can’t increase their prices based on inflation. Yes, they are affected by it, but they work around this situation. The answer is the shrinkflation tactic. It is a way of providing the same product at the same price. But one thing that changes is the size of the item.
You can find examples of shrinkflation in items such as chips, soaps, and chocolate bars. Moreover, it is a great way for a company to maintain its market share and domination without losing customers. So, let’s take a brief look at the shrinkflation process and how it changes based on economic circumstances.
What Is Shrinkflation?
As discussed earlier, shrinkflation is the process of reducing package size and quantity. Furthermore, this change is substantially small. At first, you won’t even notice it, as the change can range from milligrams to a few grams.
Features of shrinkflation:
- Same price
- Reduction in quantity
- Observable in developing countries
Why Do Companies Do It?
The simple answer: rising raw material and production costs. Everything is connected in the economy, and everything starts with the raw material. You can also put other costs down the line.
- Multiple companies
- Same market
- Maintain market share
For companies, it’s not good to raise prices every month. So, the best way is to prevent customers from noticing price hikes. Yes, they reduce the size, but this change is very difficult to observe.
Common Industries and Examples
You can observe shrinkflation across a wide variety of products. The most common are listed below. So, the next time you go shopping, make sure to look at past receipts to get an idea of quantity changes.
- Snack foods
- Toiletries
- Household goods
- Beverages
Spotting Shrinkflation Tactic
The best way to track shrinkflation is to measure the price per gram. Since the price does change, you need to see the weight of the product.
Observational insights:
- Concave bottoms
- Thicker packaging
- Fewer sheets
- Design changes.
Moreover, when comparing packaging information, you also learn a thing or two about the product as well. This helps you become a better buyer.
The Economic and Psychological Impact
Inflation and related phenomena can impact everyday household budgets and living conditions. The world is heading into a great debt, and there’s nothing an ordinary person can do about it.
We can ask the right questions of the companies and administrations. We are not mere consumers asking for anything but customers who deserve the best services and products.
Can You Regulate Shrinkflation?
Every country has different rules and regulations. Since in developed countries, inflation hits slowly, you won’t see shrinkflation.
The phenomenon is mostly visible in developing nations. However, in the majority of nations, there are no clear rules about shrinking the sizes of products.
Is it legal to reduce the quantity? That’s debatable considering the prices are the same. As a result, not many people question the practice.
How Customers Can Protect Themselves
Inflation is inevitable. We can blame the governments, laws, banks, or wars, but it won’t change the impact of inflation. That is why everyday people should become producers.
- Unit price comparisons.
- Buying in bulk.
- Store for a long period.
You don’t need to set up big farms or production units. A simple plant that can provide you with vegetables or fruit can make a big difference. Also, in developing countries, people should ration their supplies and track costs over time.
Final Thoughts on Shrinkflation Tactic
The economies of nations differ but depend on each other. As inflation keeps growing, companies come out with ways to retain their customers.
Shrinkflation is one way to beat rising prices and service costs. However, as a customer, it is your duty to choose the best product and not compromise on quality.