Explained: Shrinkflation, or the practice of selling less of a product, at the same price as before-World News , Firstpost

Representational image. Wikimedia Commons/Ganesh Dhamodkar

It’s the middle of the day, you’re peckish, and in search of a snack. You purchase a packet of chips, in anticipation of the salty, spicy, crisp potato-ey goodness that it will contain. You tear open the bag, only to find that it seems to be filled with as much air as chip. And it feels like each time you buy a packet, the chip-to-air ratio is worse. You contrast this to your experience of chip-eating when you were a kid; surely buying a packet then seemed more worth it.

This practice of providing less of a product while commanding the same price is not limited to chips, and it’s a common consequence of inflation. It is also beginning to affect what the shelves and aisles of stores and supermarkets look like, after the COVID-19 pandemic struck.

What is shrinkflation?

Simply put, shrinkflation is the practice of selling a product at the same price as before, but at a lower net weight, in response to inflation and the rising prices of materials involved in the making of said products. At the root of a business decision such as this is the tendency of consumers to be more price-conscious than they are cognisant about the change in weight of a product, reports NPR.

An example similar to what many experience with packets of chips is the gumball — round sweets dispensed by vending machines. The increase in the price of sugar, coupled with design-related limitations, led gumball manufacturers to insert a hollow inside the sweet, which was previously solid.

Shrinkflation has been observed in products outside of the realm of food, too, such as potting soil and facial tissues, reports CBS.

Brands have tried to justify shrinkflation-related decisions as being about promoting lower consumption, especially in the case of edible goods, and also as an environmentally conscious decision. Some also claim it is part of a drive to improve the quality of their products.

Is it a new phenomenon?

“Shrinkflation… is probably as old as mass consumerism,” an NPR piece says. The trend has been visible during many economic downturns across the world.

Bloomberg Quint reports that it was humourist Art Buchwald who was the first to sound the alarm about the phenomenon: “In a column entitled Packaged Inflation published in 1969, he lampooned the growing tendency to conceal price increases. Tongue in cheek, he praised American industry for ‘devising new methods to make the product smaller while making the package larger’.”

In the 70s, with an increase in inflationary pressures, many companies in the US took to ‘downsizing’ — demanding an unchanged price, while offering less than in the past. Sometimes, even the packaging of a good remained the same, as was the case of Rice-A-Roni, a post-war favourite in the US.

NPR reports that downsizing, the original term for this practice, was first referred to as shrinkflation by economist Pippa Malmgren a decade ago.

What does it say about the state of the economy?

Those who are clued into the trend and study it, look for signs of shrinkflation when it is reported that a particular country’s economy is undergoing inflation. Some regard it not just as a consequence of inflation, but also an indicator of it.

This trend is linked intrinsically to supply and demand imbalances, too, especially in the context of the COVID-19 pandemic. As consumers return to purchasing goods that they had stopped consuming, such as a restaurant business coming back to life and being in need of vegetables and meat, suppliers are tasked with providing goods in a manner that ensures they don’t go out of stock, and that a continued supply is maintained. In the case of tissue paper, which was wiped off of shelves in the US when the pandemic broke out, a brand may choose to shrinkflate because the demand has been high across a long period of time.