Shrinkflation

Toblerone chocolate bar, 2006

2016 Toblerone bar from the United Kingdom with larger gaps between peaks, using 10% less chocolate^[1]

In economics, shrinkflation, also known as package downsizing, weight-out,^[2] and price pack architecture^[3] is the process of items shrinking in size or quantity while the prices remain the same.^[4]^[5] The word is a portmanteau of the words shrink and inflation. Skimpflation involves a reformulation or other reduction in quality.^[6]

Shrinkflation allows manufacturers and retailers to manage rising production costs while maintaining sales volume, operating margin, and profitability, and is often used as an alternative to raising prices in line with inflation.^[7]^[5] Consumer protection groups are critical of the practice.

^ Cite error: The named reference toblerone was invoked but never defined (see the help page).
^ "More than 2,500 products subject to shrinkflation, says ONS". BBC News. Archived from the original on 2017-07-24.
^ J. Edward Moreno (2024-05-31). "What's a fancy name for shrinkflation?". NY Times. Retrieved 2024-07-03.
^ "Shrinkflation: When less is not more at the grocery store". The Conversation. 2018-05-28. Retrieved 2021-09-14.
^ ^a ^b "Beyond Inflation Numbers: Shrinkflation & Skimpflation". stlouisfed.org. Retrieved 2024-11-24. Businesses know that for some goods and services, consumers are more sensitive to changes in price than to changes in quantity, and this tendency often allows businesses to benefit from shrinkflation.
^ Cite error: The named reference :1 was invoked but never defined (see the help page).
^ McNair, Kari (2023-02-02). "Getting less for the same price? Explore how the CPI measures "shrinkflation" and its impact on inflation". Bureau of Labor Statistics. Retrieved 2024-11-24. As input costs increase and costs to create a product rise, companies can increase the list price of a good or they can offer a smaller amount of the product for the same price. So, a candy bar's size might change from 1.6 ounces to 1.5 ounces, yet the price stays the same. In other words, the price per unit the consumer pays increases as the amount they purchase decreases, while the price they pay at the register remains the same. Downsizing is common across food and household commodities, including potato chips, paper towels, cereal, cleaning supplies, and candy. Manufacturers change sizes because market research indicates that consumers are more sensitive to price change than size change.

[toblerone-1] Cite error: The named reference toblerone was invoked but never defined (see the help page).

[:2-2] "More than 2,500 products subject to shrinkflation, says ONS". BBC News. Archived from the original on 2017-07-24.

[:3-3] J. Edward Moreno (2024-05-31). "What's a fancy name for shrinkflation?". NY Times. Retrieved 2024-07-03.

[4] "Shrinkflation: When less is not more at the grocery store". The Conversation. 2018-05-28. Retrieved 2021-09-14.

[stlouisfed-5] "Beyond Inflation Numbers: Shrinkflation & Skimpflation". stlouisfed.org. Retrieved 2024-11-24. Businesses know that for some goods and services, consumers are more sensitive to changes in price than to changes in quantity, and this tendency often allows businesses to benefit from shrinkflation.

[:1-6] Cite error: The named reference :1 was invoked but never defined (see the help page).

[7] McNair, Kari (2023-02-02). "Getting less for the same price? Explore how the CPI measures "shrinkflation" and its impact on inflation". Bureau of Labor Statistics. Retrieved 2024-11-24. As input costs increase and costs to create a product rise, companies can increase the list price of a good or they can offer a smaller amount of the product for the same price. So, a candy bar's size might change from 1.6 ounces to 1.5 ounces, yet the price stays the same. In other words, the price per unit the consumer pays increases as the amount they purchase decreases, while the price they pay at the register remains the same. Downsizing is common across food and household commodities, including potato chips, paper towels, cereal, cleaning supplies, and candy. Manufacturers change sizes because market research indicates that consumers are more sensitive to price change than size change.

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