Paying the same, getting less: welcome to the world of ‘shrinkflation’
Shrinkflation happens when products get smaller, but retailers charge the same price. It most commonly affects food items and tends to happen when raw material prices rise, such as sugar or cocoa.
In 2016 and 2017, there have been 470 and 320 instances of shrinkflation respectively. This is below the peak in 2014, when there were 678 instances. Contrary to the popular view, instances of shrinkflation do not track CPI inflation – for example, the last peak in shrinkflation was in April 2014, which came after a sustained three-year fall in inflation.
The ONS also dismissed speculation about a ‘Brexit’ effect, saying the phenomenon had not become notably more prevalent since the Brexit vote.
Most of the changes are in the ‘Sugar, Jam, Syrups, Chocolate and Confectionery’ category, which only makes up a small part of the inflation basket of goods. The prices of both white sugar and cocoa are currently nearing five year lows having peaked in July last year.
The phenomenon has been seen in products such as Toblerone, where the gaps between the ‘peaks’ have got wider. Manufacturers say that it stops them having to put up prices as raw material costs increase.