GROCERIES are becoming more expensive. What people may not have noticed is they’re getting smaller too.
By reducing the size of, say, a jar of jam, a food company can effectively charge more for it while avoiding a sticker price hike that would dent sales. It’s not a new tactic, but “shrinkflation” is back in vogue now the industry is grappling with soaring costs of everything from wheat to vegetable oils and energy.
1. When did this begin?
Humorist Art Buchwald was among the first to draw attention to the practice in a column entitled “Packaged Inflation” published in 1969.
It became more widespread during the 1970s, when manufacturers looked for creative ways to protect their profit margins from cost increases and stagnant growth. Today you can witness shrinkflation, also referred to as “downsizing,” anywhere from Australia to India and the UK.
In the years following the Brexit vote, Britain’s Office for National Statistics noticed more examples of product shrinkage, including Mondelez International Inc. reducing the weight of some of its Toblerone chocolate bars. They reverted to their original dimensions following an outcry from consumers.
2. What kinds of goods are affected?
Everything from chocolate to crisps, cereals to soup and even dog food and washing detergent. If it’s in a packet, it can be shrunk. Sometimes the price will stay the same and sometimes it’s reduced disproportionately to the fall in size or weight, making it harder for shoppers to realise they’re getting less for their money.
Chocolate draws the most complaints, followed by cheese and milk, according to UK online retailer Britsuperstore, which analysed data on Martin Lewis’s Money Saving Expert website.
3. Which brands are the worst offenders?
Most of the big food manufacturers do it, from Nestle SA to Mondelez, which recently drew criticism for reducing the Cadbury Dairy Milk sharing bar to 180 g from 200 g.
German dairy producer Muller shrank its Corner yogurts to 124 g from 130 g while UK-based Burton’s Biscuit Company cut packets of Maryland chocolate chip cookies to 200 g from 230 g.
In the US, PepsiCo reduced the number of chips in its Doritos packs, Domino’s Pizza Inc. put fewer chicken wings in its carry-out offer and Tillamook cut the size of its ice-cream cartons to 48 ounces from 56 ounces.
4. Can I do anything about it?
It’s hard to avoid in today’s world of packaged consumables, unless you can still find a shop that sells its goods by weight. Consumers can contrast prices online using comparison sites and buy supermarket-branded goods rather than big brands to get the best value for money.
5. What does the food industry say?
Companies have given various explanations for cutting portion sizes. Some say shoppers prefer to buy a little less if it’s still affordable, others that it’s a way to meet public health targets or protect the environment.
Mondelez said it was the first time in a decade that it reduced the size of its Dairy Milk bars and that it did so to stay competitive. About half of UK retailers said it’s better for their sales to cut packet sizes than to raise prices, according to a survey by Shopmate, which operates a till system for convenience stores. BLOOMBERG
