Shrinkflation is a curious term that combines two essential concepts: “Shrink”  refers to a change in the size or quantity of a product. “Inflation” signifies the general rise in the price level of goods and services, over time.

When companies subtly reduce the size or quantity of a product while maintaining the same price (or even slightly increasing it), we encounter shrinkflation. Essentially, you’re getting less product for the same amount of money.

Companies resort to shrinkflation to safeguard or enhance their profit margins without causing too much consumer backlash. By reducing the product size, they can maintain profitability without overtly raising prices.

When production costs increase (such as raw materials, labour, transport, or packaging), companies face a dilemma:  Increase the product price (which consumers notice immediately) or decrease the product size (hoping consumers won’t notice or at least won’t mind because the price stays within their affordability budget).

Companies do according to labelling regulations define the weight of the product on the packaging, but how many of us analyse the labels before buying?  It would hardly be a great marketing campaign for companies to highlight the reduction in size of their products, so it’s done subtly.

Classic cases of shrinkflation:

Imagine your favourite potato chips. The company reduces the contents in the bag by 5%, yet the price remains unchanged. Most people won’t immediately notice the number of chips is less because the bag looks the same size.

Chocolate bar. That beloved chocolate bar you’ve always enjoyed? Suddenly, it becomes narrower, but the price remains steady.

Ever noticed that toothpaste tubes are getting slimmer? That’s another instance of shrinkflation at play.

Unlike traditional inflation, where prices directly increase, shrinkflation operates more subtly. Consumers often miss the reduction in product size. You might not notice a 5% decrease in your cereal box, but you’d notice a 5% price hike.

Suggestions to avoid falling prey to shrinkflation and making the most of your budget:

Don’t stick to a brand just because you’ve always bought it. Be open to trying new products and brands, especially if they’re on sale. Switching between brands can help you find better value for your money.

Store brands (generics) are often made by major manufacturers and rebranded. They offer nearly identical quality at a better price. Many store brands are equal in taste to name-brand counterparts.

When shopping, check the price per unit (e.g., price per 100g). Compare products of different sizes to ensure you’re getting the best value. Look for the price per unit on the grocery store shelf. Take the time to compare prices and consider switching stores if needed.

Keep an eye out for those smaller packages! Shrinkflation is like a magician’s trick—making things disappear while keeping the price tag intact.