Is ‘shrinkflation’ a better option than charging higher prices at retail?
A recent Morning Consult survey concludes that only 25 percent of U.S. adults have failed to notice “shrinkflation” in any grocery categories, and many that have are seeking alternatives.
Shrinkflation refers to the practice of decreasing the size or quantity of an item while keeping the price the same.
According to the survey of U.S. adults conducted between Aug. 19 to 21, among those who have noticed shrinkflation:
- Forty-eight percent elected to buy a different brand;
- Forty-nine percent chose a generic product instead;
- A third chose to buy products in bulk rather than smaller packages;
- Thirty percent stopped purchasing from specific brands when they noticed shrinkflation.
The overall survey found that 65 percent of all respondents are “very” or “somewhat” concerned about shrinkflation. The top category in which shrinkflation was noticed was snacks, followed by pantry items and meat.
An advocacy group last week in France launched a petition to stop the practice. The group, Foodwatch, has charged that shinkflation is “misleading on both sizes and prices for regular consumers.”
Still, the strategy is common even outside inflationary periods since price is the factor taken most into consideration by consumers. Most developed countries now have laws making the display of unit pricing mandatory in order to protect consumers. Ongoing chatter about Inflation, nonetheless, is making the practice better known.
Frito-Lay confirmed to Quartz that it shrunk Doritos’ bag size to 9.25 ounces from 9.75 ounces. A Frito-Lay representative told Quartz, “Inflation is hitting everyone … we took just a little bit out of the bag so we can give you the same price and you can keep enjoying your chips.”
A study from researchers led by Sydney’s Macquarie University from earlier this year found that shrinking sizes were preferable to price hikes because “price is more noticeable and is given more weight than size.”
A slightly higher price at a smaller package shrink was even more preferable.
The researchers concluded in The Conversation, “Our results confirm what marketers have clearly gleaned over the past decade. Consumers’ cognitive biases are strong. So you can expect ever more shrinkflation and for more ‘price drop’, ‘discount’, ‘new price’ and ‘price match’ tickets to adorn supermarket shelves.”
- Consumers’ Sensitivity to ‘Shrinkflation’ Is Leading Them to Switch Food & Beverage Brands – Morning Consult
- 64 percent of consumers are worried about ‘shrinkflation.’ What it is and how to watch for it while shopping – CNBC
- Consumer Digest: August – 8451
- How companies are hiding inflation without charging you more – Quartz
- Petition launches against ‘shrinkflation’ in shops in France – Connexion France
- Lindt, Danone and Kiri accused of “shrinkflation” on food products – News In France
- Why getting less with shrinkflation is preferable to paying more – The Conversation
- Will ‘shrinkflation’ grow into a big problem for CPG brands? – RetailWire
DISCUSSION QUESTIONS: How open should retailers be to accepting shrinkflation moves from vendors? Do you agree that consumers would rather see smaller packages than higher prices?