Shrinkflation means that when the companies keep the prices same as before but they reduces the quantity in the product. These types of strategies are now generally applied by most of the companies,.
These type of strategies are most provided by the companies who helps in fulfilled the regular demand of the product and services.
Shrink inflation is when a product decrease its quantity while keeping the price the constant. For example, reducing the quantity of chips, tissue paper, chocolates are the some of the examples of shrinkflation. In other words, shrinkflation occurs when goods shrink in size (Decrease in Quantity) but consumers pay the same price as before. It occurs when manufacturers decrease products to offset higher production costs but keep retail prices same.
Shrinkflation, a practice where companies maintain product prices while reducing quantity, has become increasingly prevalent, prompting a need for accurate and balanced discussion.
From a consumer perspective, the “invisible shrink” can have a significant psychological impact, as individuals feel they are getting less for their money. Practical guidance on “decoding the packaging” and strategies to manage grocery budgets are essential for navigating this trend.
Furthermore, the “emotional toll” of shrinkflation, including feelings of distrust and frustration, should not be overlooked. The “illusion of value” created through marketing techniques that mask reduced product sizes also warrants exploration.
Defining shrinkflation as a reduction in product quantity while maintaining price, often employed by companies fulfilling regular consumer demands, is crucial for clarity. This practice, used to offset rising production costs, distinguishes itself from traditional inflation.
Analysing company strategies reveals that “the economics of shrinkflation” involves complex factors driving companies to downsize instead of raising prices. Distinguishing “shrinkflation vs. inflation” is vital for understanding their distinct impacts.
The transparency and consumer trust is being affected by the Examining “how companies use packaging and marketing to disguise shrinkflation” provides insights into deceptive practices. Additionally, “the long-term effects of shrinkflation and brand loyalty” highlight potential shifts in consumer behaviour.
Investigative and analytical approaches, such as “a deep dive into shrinkflation” to identify affected industries and examining “the global reach of shrinkflation,” offer data-driven perspectives. The debate surrounding “regulations needed for shrinkflation transparency” is essential in discussing consumer protection. Throughout these discussions, accuracy, balance, and clarity are crucial, ensuring information is supported by reliable sources, acknowledging economic pressures on companies, and using accessible language for a general audience.
Key Takeaways
- Reducing the size of a product quantity while maintaining its MRP.
- It is a type of hidden inflation
- It helps the companies to maintain the profit margin without change
- It directly impact on customer as they may shift towards the other brands and may lead to distrust.
Example
AppleMark
In 2016, Mondelez International, the company that owns Toblerone, made a change to the shape of its chocolate bars sold in the United Kingdom.
Specifically, they increased the gaps between the iconic triangular peaks of the Toblerone bar.
This alteration resulted in a reduction in the weight of the chocolate bar, while the price remained largely the same.
IMPACT
The middle class customer is now under trapped with the current situation of the market as he is not able to live without these products as well as nor discontinue buying them as he is habitual of all of them.
The Higher income group please doesn’t have much impact over shrinkflation. But this play a crucial role in misleading the customer
The impact of shrinkflation on consumers is multifaceted, extending beyond simple economic considerations to encompass psychological and emotional effects. Primarily, shrinkflation acts as a form of hidden inflation, eroding the purchasing power of consumers by providing less product for the same monetary value.
This can lead to increased financial strain, particularly for those on tight budgets, as essential goods effectively become more expensive. Beyond the direct financial impact, shrinkflation can also breed distrust and frustration, as consumers feel deceived by companies that subtly reduce product sizes. This erosion of trust can damage brand loyalty and lead consumers to seek alternative products or brands that offer better perceived value. Furthermore, the practice can create a sense of unfairness, as consumers feel they are not receiving the full value they expect from their purchases. In essence, shrinkflation not only impacts the consumer’s wallet but also their perception of fairness and trust in the marketplace.
One way to avoid shrinkflation is by start buying competing brands availing in the market. Competing brands may not have disadvantages as yet and so you may get more value or the benefits for the price you pay. One alternative method is opting for store brand rather than a name brand. Store brands in general are cheaper in prices as compared to the name brands.
Blog By:
Ms. Yashi Sharma
Assistant Prof.
Biyani Group of Colleges
