Shrinkflation, skimpflation: Paying the same for shrunken goods, poor service

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MANILA, Philippines—Amid a persistent rise in prices of goods and services, when costs of certain products (example, cereals) go unchanged, you might think: ‘What a bargain’ or ‘What a huge savings’. But is it, really?

The Philippine Statistics Authority (PSA) recently reported that the country’s headline inflation rate in June 2022 was 6.1 percent, a three-year high since November 2018’s 6.1 percent and October 2018’s 6.9 percent.

According to the PSA, the higher inflation rate can be attributed to higher annual growth rate in the prices of food and non-alcoholic beverages, which saw a rise from 4.9 percent in May 2022 to 6.0 percent in June 2022.

READ: Inflation for June 2022 hits three-year high of 6.1 percent — PSA

In that sense, when consumers see that the price of their favorite or usual brand of groceries—mostly food or even cleaning products—did not increase, they might continue to place those goods in their carts and check out.

READ: Life will be better? Surveys show optimism growing

However, as it turns out, when prices of goods and services shoot up, some companies hide behind the so-called shrinkflation and skimpflation, which slightly alter the quality of products and services while maintaining the same level of retail prices—a detail often overlooked by some consumers.

In this article, INQUIRER.net will explain more about shrinkflation and skimpflation, and how to spot and adjust to these trends.

From shrinkflation to skimpflation

In 2016, the popular Swiss chocolate brand Toblerone—known for its iconic shape, a series of joined triangular-shaped chocolate—changed its appearance, which angered many fans in the United Kingdom and across the globe.

“The shape of the bar may have looked like the Swiss Alps before, now it’s a bit more Holland,” said British consumer Tony Mathews.

GRAPHIC: Ed Lustan

The world-famous chocolate, while being sold at its usual price, underwent shrinkage from a net weight of 170 grams to 150 grams. The gap between the prisms in each chocolate bar likewise visibly widened.

READ: Toblerone chocolate shrinks, fans grumble

This, for some experts, is one of the high-profile examples of shrinkflation—when the size or volume of products shrinks or reduces while being sold at its usual retail price.

It happens when companies try to conceal the impact of inflation by shrinking their products and justifying it by sticking with prices that consumers are used to.

According to Frances Ryan, a columnist for the UK newspaper The Guardian, the trend can be considered understandable as most retailers imposing the strategy often blame rising costs and increasing competition in the market.

GRAPHIC: Ed Lustan

However, Ryan said, “the problem is, it feels sneaky – corporations quietly giving their so-called valued customers less, while taking the same money, and hoping no one will notice. Or worse, knowing we will and betting we’ll buy it anyway.”

“No matter what businesses are up against, shrinkflation sums up multi-million-pound companies choosing to push the cost on to already squeezed families. That leaves a bad taste in the mouth,” she added.

A Forbes article has also described shrinkflation as “a form of deception and is therefore dishonest.”

While consumers have to deal with the strategy or trend, in 2021, amid the COVID-19 pandemic, an NPR article noticed a trend similar to shrinkflation but this time, it involved the quality of goods and services.

“The economy-wide decline in service quality that we’re now seeing is something different, and it doesn’t have a good name. It’s a situation where we’re paying the same or more for services, but they kinda suck compared with what they used to be,” NPR’s Greg Rosalsky wrote.

“We propose a new word to describe this stealth-ninja kind of inflation: skimpflation.”

Skimpflation, as described by Rosalsky, happens when, instead of simply raising prices, companies skimp on goods and services they provide.

“Skimping has a derogatory connotation,” he said. However, “many businesses, especially small businesses, are struggling to cope with surging costs and pandemic-related expenses.”

GRAPHIC: Ed Lustan

“They’re having a hard time finding workers at the wages they used to pay. And some businesses may be unable to afford paying what it takes to recruit workers in the current environment,” he added.

Instead of workers’ increasing wages, businesses cut back on the quality of their services to remain profitable—which fits the Oxford dictionary definition of the word “skimp”: “Expend or use less time, money, or material on something than is necessary in an attempt to economize.”

READ: Skimpflation and shrinkflation – everything to know

Get to know your products

While factors like inflation and labor shortage push businesses to sneakily give way to shrinkflation and skimpflation, an expert said there are ways to avoid these strategies.

“Consumers are price conscious—they’ll spot that price increase—but they’re not net-weight conscious,” consumer advocacy lawyer Edgar Dworsky told The Washington Post.

GRAPHIC: Ed Lustan

“If you ask someone how many ounces is in this jar of mayonnaise, or in the cereal box you buy, they’re going to shrug their shoulders. That’s kind of how manufacturers take advantage, because you don’t have those sizes memorized,” he added.

To limit how much shrinkflation and skimpflation impact consumers’ grocery bills, food industry analyst Phil Lempert gave the following tips:

Be mindful of the unit pricing

If the price of a product retains its familiar price, consumers may not notice the changes in appearance or quantity. Dworsky suggested examining shelf tags for price per ounce, pound, or sheet.

“That’s kind of how manufacturers take advantage, because you don’t have those sizes memorized,” Lempert told The Washington Post.

Inspect the size of products

Lampert likewise told consumers to avoid “haphazardly” grabbing items from store shelves. Instead, people should remember things, like what the usual packaging of certain items looks like, and compare it when buying the same item again days, weeks, or months after.

“That’s kind of how manufacturers take advantage because you don’t have those sizes memorized,” said Dworsky.

Look out for sales and clearance items

An easy way to reduce the impact of shrinkflation and skimpflation on people’s grocery bills is through sales or clearance items.

Forget brand loyalty

“Don’t turn up your nose at store brands. They usually are the last to downsize, they typically cost 20% to 30% less than major brands, and their quality is equal to or exceeds the name brand,” said Lempert.

“Look at the ingredients and nutritional information. Odds are, if they are identical, you will be satisfied, and store brands typically have a return guarantee.”

Read labels

Consumers should also be vigilant with product labels and watch for the words “new and improved.”

“What has improved is the company’s bottom line,” said Dworsky.

Experts said most of the time, these words might mean that a laundry detergent will now clean 96 loads instead of 100.

In some cases monitored by consumers, products—for example, tissue rolls—will have those exact words plastered on them—and even have different packaging visuals—but a little label would indicate that the usual 350 sheets per roll will be reduced to 300 sheets.

Put in the time

Lastly, both Lempert and Dworsky advised consumers to put in the time when grocery shopping to avoid unknowingly purchasing items that have already undergone shrinkflation or skimpflation.

Allotting more time in inspecting and comparing items would help consumers truly get their money’s worth when purchasing items.

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