From Aberystwyth to Winchester, consumers everywhere are experiencing the pinch of shrinkflation. Businesses may be shrinking the size or number of products, but they’re not reducing prices. The price of raw materials and production continues to go up. Faced with the prospect of raising prices, many brands are opting instead to reduce their size. This is a trend you can see in everything from soap to bagels, costing shoppers more without their knowledge every time they check out.
For Frazer, a routine but picky consumer, the switch was only recently brought to his attention. Even his favorite bars of Simple soap have gone from 125 grams to 100 grams! He’s definitely not the only one noticing these changes. In a recent investigation by Guardian Money, we found that bagels have mysteriously shrunk in weight from an average of 90 grams down to 85 grams. This shift has left many consumers questioning how they can ensure they are getting value for their money amidst rising prices and reduced product sizes.
Shrinkflation is not just a fad affecting a handful of products. Several other brands, like Cafédirect and Yeo Valley, have made equivalent moves despite pointing to soaring production costs as a justification. Reducing sizes but lowering prices At Cafédirect they’ve tried to make it less painful for consumers by not only reducing size, but reducing price too.
Understanding Shrinkflation
Shrinkflation, in particular, has had Americans up in arms for many years. During 2012-2017, data showed at least 2,529 products that reduced their servings per container. Mark Jones, a partner at Gordons LLP, adds that shrinkflation isn’t a new phenomenon. Now, it’s receiving higher profile treatment as inflation gets quickly out of control.
New research shows shrinkflation has reached beyond typical products. Pet food packaging has experienced considerable reductions too, with brands many of us recognize now offered in smaller packages than they once were. As an example, we were able to reduce our dog catering pack sizes from 15kg down to 12kg. That’s just one recent example of how companies are changing their product mix to cope with higher input costs.
Awareness is critical Alex Lawrence, senior strategic insight director at Circana, stresses the need for consumer awareness. She agrees with his recommendations that shoppers can shop their way into not being disadvantaged by comparing unit prices and product ingredients. He adds that the is a difficult trend to see. That means you need to read ingredient labels very carefully, or at all, on the products you purchase.
“While we have not had updated shrinkflation data from the ONS since 2017, the trend has continued, with bread and cereals, personal care, meat and confectionery being the areas where the practice is most prevalent.” – Alex Lawrence
The Impact on Brands and Consumers
So, what have successful brands done to balance the sting of increasing costs with customer retention and loyalty? An Arla spokesperson said that they did adapt their recipes to make them better. These changes primarily target reducing fat while still making sure chicken tastes delectable. This tactic lets them return savings to consumers while maintaining strict product quality.
Companies like Frito Lay and Campbell’s have gotten press for their efforts to shrink package sizes while keeping retail prices flat. Co-op has worked to offset costs by reducing the weight of its ground coffee to keep retail pricing steady. In a statement, a spokesperson said the carrier was able to save customers more in the long run even as they faced increasing costs themselves. They were vocal about wanting to see more discounts that are exclusive to members, too.
“We’ve managed to maintain the retail price and not pass this cost increase on to customers, and in fact, Co-op members benefit from an additional 30p member-only price reduction.” – Co-op spokesperson
Just like Harringtons, they are realistic about the effects of rampant inflation. They’ve tried to do everything in their power to absorb costs while still being sustainable for their business,” a spokesperson explained.
“We have done our utmost to absorb costs in the face of spiralling inflation, and ultimately had to consider how to continue delivering this, while maintaining a sustainable business.” – Harringtons spokesperson
Regulatory Changes and Consumer Awareness
The French government is taking a strong stand against shrinkflation. To address this growing concern, they’ve issued new regulations requiring manufacturers to honestly and clearly disclose any size reductions to consumers. Internationally, it would set a powerful precedent that might encourage companies in other countries, including the UK, to do the same.
In response to these actions, some retailers have recently started putting up shelf tags, advising shoppers when shrinkflation is in effect. To avoid falling into this pit of confusion and secrecy, Carrefour has already rolled out this strategy to 26 products from industry giants like Coca-Cola and Danone.
With the growing trend of shrinking products, it’s more important than ever that consumers pay attention to product sizes and prices. Alex Lawrence recommends that shoppers look for and compare unit prices closely and pay attention to changes in packaging.
“It’s well documented that there is an unprecedented rise in costs and inflation across the food and farming system. In order to protect our customers as much as possible from this cost rise, 12 months ago we reduced the weight on a limited number of our yoghurt products.” – A spokesperson
The situation points to a larger problem when it comes to how consumers engage with automakers. Most shoppers wouldn’t notice shrinkflation unless they look closely at the finer points on the packaging. Consumers sometimes miss that part about reducing overall weight. Consumers only pay attention when they find out that they’re getting a smaller product and still paying the same amount.