5-speed listening (Shrinkflation - Level 5)

'Shrinkflation' now widespread in goods and services






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The phenomenon of "shrinkflation" is spreading worldwide. Companies are reducing the size of their products or range of services while maintaining prices. The prices of raw materials are rising. Another example is to place smaller numbers of items in larger boxes, so shoppers think they are getting more for their money. Shrinking the size of products is a cost-cutting strategy. Manufacturers know that consumers are more sensitive to price than quantity or quality. Most people will make a regular purchase, even if it has shrunk, as long as the price is the same.

A chocolate bar maker has shrunk the size of its flagship product by 10 per cent to maintain its bottom line. The company said: "We look to absorb costs…in this difficult environment [so] we've had to…slightly reduce the weight of [chocolate] bars for the first time since 2012, so that we can keep them competitive." The service industry is trying to avoid price rises. Hotels have made daily housekeeping services "opt in". This means that guests must now ask to get their room cleaned. Many other free services we have taken for granted are disappearing or being shrunk.

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Shrinkflation - Level 4  |  Shrinkflation - Level 6

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