Your favorite chocolate costs the same but appears smaller. You’re not mistaken. The days when chocolate came in 100-gram packaging are long gone. Nowadays, this product is mostly found on store shelves in packages of 80 or 85 grams.
But it’s not just chocolate that’s shrinking; if you look closely at the supermarket shelves, you may notice that as global inflation rises, sausages come with less meat, the jar of your favorite jam is no longer 500 grams but 380 grams, and even potato chips don’t seem to be the same size, or they are, but with fewer crisps and more vacuum.
Product in smaller packaging
Shrinkflation (a term composed of the two words shrink and inflation, which refer to a change in product size and an increase in prices, where in practice companies reduce the size or quantity of products, but maintain the same prices) has been a practice for over a decade, especially prevalent in the food and beverage industry.
It’s also called hidden inflation because consumers don’t see an explicit price increase. Its popularity has grown during and after the COVID-19 pandemic, as the global economy struggled with supply chain issues and rising raw material costs.
Consumers are more likely to notice higher prices than smaller packaging
Retailers justify this practice by citing increased production costs. In a situation where the cost of raw materials needed for production rises, a company can act in two ways: increase the price of the product or keep it the same but reduce the size of the product (shrinkflation). Retailers mostly choose the latter, because they believe that consumers are more likely to notice higher prices than smaller packaging.
However, that picture is slowly changing. The latest Barclays spending report shows that more consumers are concerned about hidden inflation and feel victimized by the shrinking of goods. Two-thirds (65%) of consumers have noticed that some products are now being sold in smaller packages, yet they cost the same or more than usual.
Some companies inform customers about changes
Just as companies are not obligated to inform customers that their favorite product now comes in larger packaging, they are not required to suggest to the buyer that they have reduced the size of the product either. However, there are companies that prefer to inform their customers about changes related to the brand.
“In Japan, snack manufacturer Calbee Inc. announced a 10% reduction in weight and a 10% price increase for many of its products, including two types of chips. As the reason, they cited the sudden increase in the price of raw materials,” reports one news agency.
The trend of price increases has not bypassed our country either. The Agency for Statistics of Bosnia and Herzegovina (BiH) states in its report that the price level in December 2023, regarding basic life necessities, was 2.2% higher.
Challenges with prices and purchasing power are facing many economies globally. One of the best ways to notice shrinkflation is to, next time you pass by the food aisles, check if a particular product comes in redesigned packaging or with a new slogan. Both signify that the company has made a certain change, which could be in size, Forbes writes.
