'Shrinkflation' isn't a trend – it's a permanent hit to your wallet

The phenomenon of 'shrinkflation' – the reduction of a product's size or quantity while maintaining its price – is becoming increasingly prevalent. As the global economy contends with rising raw material costs, supply chain disruptions, and increased post-pandemic labour wages, consumers are shouldering the burden of escalating production expenses. This practice, which predominantly occurs during periods of inflation, is evident in retail outlets worldwide. For instance, French supermarket Carrefour has recently begun placing stickers on items to alert consumers when a product's size has decreased without a corresponding price reduction.

Consumers are becoming aware of the transition to smaller packaging and are understandably displeased, particularly as their purchasing power is already diminishing due to inflation. However, a more significant, long-term issue is emerging: historical instances of shrinkflation indicate that the trend does not reverse even when inflation subsides. According to Mark Stiving, the chief pricing educator at Impact Pricing, consumers are more likely to notice price increases than size decreases. Consequently, companies utilise shrinkflation as a less noticeable method of raising prices.

The changes brought about by shrinkflation are often incremental and may not be immediately apparent to consumers. For example, a beverage that was previously sold in a 12oz (340g) bottle may now be available in a 10oz (283g) bottle for the same price. Industry experts suggest that once these reduced sizes are introduced, they are likely to become the new standard. Consumers, having no alternative, must adapt to these changes. In some instances, they may switch to more cost-effective products, but this is not always possible, especially for essential items. Despite the correlation between shrinkflation and inflation, product sizes typically do not increase again even after economic difficulties have been resolved.