This content has been automatically translated from Ukrainian.
This phenomenon is called shrinkflation.
What is shrinkflation in simple terms
Shrinkflation is a situation where the manufacturer reduces the amount of product in the packaging but keeps the price approximately at the same level.
For example:
In the case of cookies for 60 UAH:
- previously 1 kg cost 120 UAH;
- now 1 kg costs approximately 133 UAH.
So the product has become more expensive by about 11%, even though the packaging price remains 60 UAH.
Why do manufacturers do this?
The main reason is increased production costs.
Manufacturers may face higher costs for:
- raw materials;
- electricity;
- fuel;
- packaging;
- logistics;
- wages;
- rent and other expenses.
There are two obvious ways to respond to this: raise the price or reduce the amount of product.
For example, instead of raising the price of the pack from 60 to 70 UAH, the manufacturer can keep the price at 60 UAH but reduce the weight from 500 to 450 grams.
For the buyer, such a change may be psychologically less noticeable.
Why does shrinkflation work?
People often remember the price of the package, but not its exact weight.
We may remember that the pack cost 60 UAH, but not remember that it previously contained 500 grams.
This is why reducing the packaging may go unnoticed compared to a direct price increase.
Sometimes manufacturers also change the packaging design so that it looks almost the same as before.
Is shrinkflation a hidden price increase?
In fact - yes, if you look at the price per unit of product.
This is why when comparing products, it's important to look not only at the price of the package but also at the price:
- per 100 g;
- per 1 kg;
- per 100 ml;
- per 1 liter;
- per piece.
For example, a pack of coffee for 300 UAH may seem cheaper than a pack for 320 UAH. But if the first has 400 g and the second has 500 g, the situation is quite different.
Shrinkflation occurs not only with food products
This effect can be found in almost any category of goods.
For example:
Household chemicals: a bottle of detergent was 2 l, now it's 1.8 l.
Cosmetics: the cream was 100 ml, now it's 90 ml.
Sweets: the chocolate bar was 100 g, now it's 90 g.
Beverages: the bottle was 1 l, now it's 900 ml.
Snacks: the pack looks almost unchanged on the outside, but there is less product inside.
There is even a kind of opposite to shrinkflation - when the packaging remains the same but the composition or quality of the product changes. Such situations are sometimes called skimpflation.
How to notice shrinkflation?
The easiest way is to compare the price per unit of weight or volume.
Not:
Cookies - 60 UAH.
But:
Cookies - 13.33 UAH per 100 g.
Then the changes become much more obvious.
If previously 500 g cost 60 UAH, that’s 12 UAH per 100 g. If now 450 g costs the same 60 UAH — that’s already 13.33 UAH per 100 g.
The price of the package hasn’t changed, but the actual cost of the product has increased.
Is shrinkflation always bad?
Not necessarily.
A manufacturer may find themselves in a situation where production costs have increased, and they need to adapt the product. Reducing the packaging may be an alternative to a significant price increase.
The problem for the buyer arises when the change is not obvious and the person continues to perceive the product as the same in price and quantity.
Therefore, shrinkflation is not a magical disappearance of money from your wallet, but rather a change in how much product you get for the same amount of money.
How to avoid overpaying
There is a simple rule: do not compare only packages - compare the unit of product.
Look at the price per kilogram or liter, even if the packages are of different sizes.
Because two packs may cost 100 and 110 UAH, but if the first has 500 g and the second has 700 g, the more expensive package may actually turn out to be more economical.
Shrinkflation reminds us of a simple thing: the price on the label is not the whole story. It’s important to know how much product you are getting for that money.
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