What is ‘shrinkflation’ and how does it affect us?
Does your favourite chocolate bar appear to be slightly smaller? You may not be imagining it, as it could be ‘shrinkflation’ in action.
This term describes the shrinking of a product’s size – even though the price remains the same. This effectively means that the product’s price has been inflated, because you end up paying the same for less.
Which products are shrinking?
Between September 2015 and June 2017, the ONS found that 206 products had shrunk in size. These products typically appear in a household’s shopping basket and in most cases the ONS found that the price had remained the same.
Size reductions were particularly prevalent across breads, cereals, personal care products, meat, sugar, sweets and chocolate.
Why is this happening?
In the past, companies blamed the rising price of raw materials. However, these prices have fallen over the last couple of years, so it doesn’t explain why some products have continued to shrink in size.
The ONS also investigated whether shrinkflation could be down to the fall in the pound. However, it doesn’t believe that this can be attributed to the so-called ‘Brexit effect’.
With this in mind, the most likely scenario appears to be that manufacturers are simply trying to boosting their profits in a subtle way.
“In an era of low inflation, the effect of price rises are pretty stealthy. We don’t notice prices creeping up a few pence here or a couple of pounds there: we just suddenly spot that somehow our money doesn’t quite go as far as it used to.
“And if you’ve missed inflation sneaking up on you, there’s a good chance you missed it’s even sneakier cousin too – shrinkflation,” explained Sarah Coles, personal finance analyst at online investment broker Hargreaves Lansdown.