Photo: Canva
French supermarket Carrefour put stickers on its shelves in France last week warning shoppers of "shrinkflation" — where the size or quantity of an item is reduced but prices are kept the same — to encourage suppliers to cut their prices as raw material prices cool.
"Obviously, the aim in stigmatizing these products is to be able to tell manufacturers to rethink their pricing policy," Stefen Bompais, director of client communications at Carrefour, explained in an interview.
The supermarket chain put labels on 26 products, reading, "This product has seen its volume or weight fall and the effective price by the supplier rise. We undertake to renegotiate this price.”
For example, a bottle of sugar-free peach-flavored Lipton Ice Tea, produced by PepsiCo, shrank to 1.25 liters from 1.5 liters, resulting in a 40% effective increase in the price per liter.
The shrinkflation warnings are in all Carrefour stores in France and will stay until the targeted suppliers agree to price cuts. These stickers could extend to other items as well. The price warnings reportedly come as Carrefour’s contract talks with major brands are slated to start in mid-October.
The French government has threatened to penalize or publicly shame suppliers that are reluctant to renegotiate lower prices with grocers amid declining prices of oil, transportation, food ingredients, and other raw materials.
Suppliers have claimed that “as inflationary pressures decrease at the start of the food supply chain, it takes time for that to transmit down the chain to retail shelves.” Other factors, including wages, weather, disease, and events like wildfires, also play a role in inflation.
Food inflation in France in France has eased in the last few months but still hangs in the double digits. In the U.S., food inflation has come down faster but remains above historical levels. U.S. grocers have indicated that they continue to collaborate with suppliers to further bring down prices. Earlier this year, Walmart reportedly threatened to replace national brands with private labels if prices don’t come down.
Shrinkflation is a standard sales tactic, but it becomes more prevalent during periods of high inflation. It has also caught more attention in the U.S. over the last two years in media coverage and with complaints across social media.
An Ipsos survey from June found that 83% of U.S. consumers are noticing that they are getting less and paying the same amount or more. And nearly as many (79%) say they feel cheated when that happens.