The concept of ‘shrinkflation’ has been floated around since the 1950s, although it has received quite a lot of attention in recent years especially as consumers have noticed how the products that they used to buy had decreased in size, number, or weight. The practice is done by manufacturers to assuage the effects of inflation and other factors like rising wages, increasing prices on raw materials, and the like on their profits. And as retail psychology goes, consumers will more readily notice an increase in prices over a decrease in the quantity or quality of the products, so from a retail perspective, it’s much easier to simply shrink the products than to increase the price.
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So, the question of whether or not it’s advantageous depends on from whose perspective we’re looking. Obviously, consumers bear the brunt of all these downsizing and cost-cutting practices that manufacturers implement to retain their profitability. However, in the long run, companies might be worse off as consumers become more aware and start to search for alternatives. This would be a great opportunity for low-cost products whose prices aren’t affected by the brands that they wear. If you can find, for example, a bag of chips that is comparable to Pringles or Lays chips, but much cheaper, then consumers, especially those who are working on a tighter budget, would go for that.
The hard part of the whole shrinkflation ordeal is that most of the products hit are necessities such as toilet paper, sanitary pads, laundry detergent, shampoo and conditioner. Is it here to stay? It depends. There are many factors to consider and it may just be a necessary evil, however, it is also possible that it will just be a stopgap measure. All we can do is to become smarter in our grocery shopping and find ways to make our budgets work.
(Image credit: Maddi Bazzocco/Unsplash)
Source: neatorama