Consumer psychology specialist Johnson explained to us why businesses might choose to reduce package size instead of raising the sticker price.
"The temptation for companies to engage in shrinkflation is clear. While customers will generally notice a price increase, and are sensitive to that change, they’re much less likely to notice a reduction in the volume they’re actually consuming," he told Bored Panda via email.
"Consumers will feel as if they’re still receiving the same value, when in reality, they’re paying the same amount for less product."
#2 The Shrink Flation Of Quality Street Over The Years Is Truly Embarrassing
However, Johnson noted that shrinkflation is, in many ways, a high-risk tactic. "If they pull it off and consumers don’t notice it, they’re able to increase their margins while maintaining the same sales, and thus, increasing their profitability," he said.
"But if consumers catch on to it, it can reflect very poorly on the brand, and risks damaging long-term sales. Consumers aren’t fans of higher prices, but at least the transaction is made transparent—they know what they’re paying, and what they’re getting," the consumer psychology specialist said.
"Shrinkflation is more subverted. It intentionally misleads consumers into thinking they’re getting more than they are actually are. Should consumers catch on to this, this dishonesty will be reflected in a much more negative perception of the brand."
According to the specialist, transparency is almost always the best practice. "To help consumers come to terms with this, they could attempt to be upfront about this downsizing and even to frame 'less' as positive," Johnson pointed out that creativity can help turn these tough situations into opportunities.
"For example, framing a smaller volume product as 'minimalist,' or in the case of perishable goods like milk, to emphasize how it’s less likely to spoil. There are many ways to attempt a more positive framing, but transparency to the consumer is paramount," Johnson told Bored Panda.
It might have been your fave packet of crisps getting slightly smaller (hi!) or a fancy brand of chocolates that seem to have fewer tasty treats that first tipped you off about the existence of shrinkflation.
Or maybe it was the sudden realization that it’s just 10 delicious double-glazed donuts you’re buying, not the usual dozen… or the fact that your top burger place (you know, the one you recommend to everyone) seems to have added a Shrink Ray(™) in the kitchen. Shrinkflation can be subtle. And it's infuriating if it's kept secret.
#7 On The Right The Normal Toblerone And On The Left The New Shrinkflated Toblerone
#9 Chocolate Digestives Disappeared Off The Shelves For 2 Months, Then Came Back 27% Smaller
The r/shrinkflation online community is home to nearly 64.2k internet users who discuss the murky practice of corporations reducing the size of their products while still charging customers the previous price.
The photos they share are real-life evidence that this effect is actually happening in stores and isn’t just some theory. And most of you Pandas reading this probably have anecdotal evidence of shrinkflation in action from your own trips to the grocery store.
Investopedia attributes the coining of the term shrinkflation (also known as ‘package downsizing’ in business) to British economist Pippa Malmgren. Shrinkflation is a response to rising production costs or increased market competition, and this subtle tactic is most often used by companies that sell food and beverages. However, there is the risk that consumers will be put off by the brand if they notice this happening.
#12 Why Shrinkflate The Package If You Can Just Put Less Product In The Same Box
According to Investopedia, shrinkflation is a form of hidden inflation, and companies rely on the fact that many of their customers won’t spot a decrease in package size, even if they might spot rising sticker prices. All of those reductions in size and quantity quickly add up, resulting in more savings and profit for the business.
The fact of the matter is that most shoppers don’t check the size of a product and, instead, focus mostly on its price. It’s only after a few rounds of shrinkflation (and possibly some of your friends grumbling about how there’s even more air than crisps in the pack) that we might finally grasp what’s going on.
Based on the findings of the UK’s Office for National Statistics, a jaw-dropping 2,529 products decreased in size between 2012 and June 2017. During that same period of time, merely 614 products became bigger. This shows just how common package downsizing is among food and beverage businesses.
It can’t be understated just how tiny some of these changes are. The Guardian reported back in 2021 that Walkers cut two packets of crisps from its 24-bag multipacks while keeping the price stable at £3.50. Meanwhile, KP peanut bags, which cost £2.50 at the time, were reduced in size from 250g to 225g. These are all changes that your regular shopper, who’s rushing about, might not spot in their day-to-day visits to the supermarket.
