Shrinkflation: Smaller product, but same price

During “shrinkflation”, manufacturers reduce the content of a product, but maintain its original price. You can find out what this tactic is all about in detail here.

Less content at the same price: This is the principle behind the so-called shrink inflation. The concept is made up of the English words “to shrink” and “(in) inflation”, the technical term for an increased price level.

The British economist Pippa Malmgren is said to have invented the concept already in 2009 to describe a hidden price increase, where the manufacturers reduce the content of a product, but do not adjust the price or only minimally. The phenomenon is now quite widespread, especially in the food and beverage industry.

What are the benefits of shrinkflation for manufacturers?

The advertised price does not change due to shrinkflation, but consumers are still spending more.
(Photo: CC0 / Pixabay / PhotoMIX Company)

Shrinkage usually means reducing portion sizes or filling a smaller quantity while keeping the price the same or only slightly reduced. In some cases, however, the term may also mean that the quality of a product or its ingredients has been reduced while the price remains the same. So there is one hidden price increase.

Shrinkage is a common reaction to rising production costs or increased competition in the market. With shrink inflation, manufacturers can still increase their profits or maintain them in the face of rising input costs (such as raw materials that have become more expensive) – and do so in secret.

Because: The companies are aware that customers probably notice price increases on the products, but minimal shrinkage of the content tends to go unnoticed. It is also scientifically proven that consumers react more sensitively to explicit price increases than to less packaging or reduced content.

Manufacturers no longer earn through shrinkflation by raising prices, but by charging the usual price for fewer or lower grades.

Shrinkflation is both a means to an end and a product of misleading packaging: the packaging is used to pretend something is not actually true. In the case of shrinkflation, the packaging and the price indicate that you are buying the same product as usual – but you are actually paying more money.

Consumer advocates criticize hidden price increases because misleading packaging is actually banned. At least that is what the Measurement and Calibration Act says. However, this law does not contain any specific rules on the relationship between content and packaging size. It is therefore not clear when consumers will actually be cheated with a misleading package. In practice, many calibration offices tolerate products with more than 30 percent air in a package.

Shrinkage in times of inflation

Food and drink are mostly affected by shrinkflation.
Food and drink are mostly affected by shrinkflation.
(Photo: CC0 / Pixabay / gingerbread)

In the past, brand manufacturers in particular used shrink inflation regularly. The Hamburg Consumer Advice Center (VZHH) has shown this for 17 years with the “misleading package of the year”. She has already given this title to a sauce from Homann, fruit muesli from Seitenbacher and Dr. Oetker, a ready-to-eat pasta dish from Mirácoli and mineral water from Evian.

But now VZHH is also warning about shrink inflation in discount stores. Due to current inflation, unnamed products would become more expensive hidden much more often. The content of these articles has been reduced, while the price has remained unchanged or has been reduced only minimally. Consumers are therefore currently paying up to 39 percent more, without this being reflected in the advertised price.

You can read more about it here: Misleading packages thanks to inflation? Consumer Center warns of rip-off.

The reason shrinkflation is so prevalent at the moment is consumers’ generally reduced purchasing power. Due to the high inflation rates, they can afford less than usual for one euro. This is obviously a problem for manufacturers. Their production costs are also rising as energy and fertilizers have become significantly more expensive and labor shortages and minimum wages are driving up staff costs.

But many do not want to risk passing on these increased costs to consumers through an obvious price increase right now. This can even more discourage consumers, who are already faced with higher prices everywhere, and make them turn to other products. By using shrinkflation, manufacturers prevent consumers from easily understanding price increases. That way, they hope not to alienate their customers with price increases that are obvious at first glance.

Here’s what you can do to avoid shrinking inflation

It is not easy to protect against shrinkflation. Many customers do not notice the scam at all – as desired by the manufacturers.

The most effective measure against shrinkflation is not to take advantage of offers that appear to be good. Get used to it instead of taking a closer look at the contents of the package first. In the second step, compare the price-content ratio with similar products. Always look at the price tags Kilogram or liter price on. This makes it easier to compare.

Shrinkage particularly affects packaged foods because the price increase of a cucumber cannot be masked with larger packaging. So give it a try Reduce the consumption of packaged foods. This saves not only money but also packaging waste. Because misleading packaging is also accompanied by massive waste: A study commissioned by the Federation of German Consumer Organizations (vzbv) has shown that 1.4 million bins could be saved in Germany each year if manufacturers wanted to dispense with packaging that contained more air as content . You can find tips for packaging-free shopping here: Avoid packaging in the supermarket: 15 tips.

Tip: Hamburg Consumer Advice Center has published a list of misleading packaging showing current cases of shrinkflation.

If you later realize that you may have bought food in a misleading package, you can strike back. Report the matter either to the Consumer Advice Center in your federal state or to the appropriate calibration office.

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