Shrinkflation

Hello folks, welcome to CCB. In today’s post I’ll educate you on Shrinkflation.

Shrinkflation is similar to inflation but this one’s got a different touch. Inflation is when the price of goods & services increases. With shrinkflation there is no change in price but you still end up paying more than you used to for your favourite bar of chocolate.

Did the above paragraph confuse you ? Well, if yes then don’t worry because I’m here to explain it to you. Well as the name suggests Shrinkflation is when the size of a product is reduced by the company but the price remains the same. So, if you were getting 50 grams of chocolate for $5 and after a year you get 39 grams of chocolate for $5, that’s called‘Shrinkflation’.

Now you might be wondering as to why companies do it ? Well, here is the answer. Companies do this to tackle inflation and increase their profit margins while making sure that they don’t lose out on their customers. If the price of the chocolate bar increases from $5 to $7, then there’s a probability that the chocolate brand may lose its market share. Here’s an example. Imagine Hershey’s priced their chocolate bar at $7 and its rival company priced the chocolate bar in the same segment at $5 but reduced the size of the bar, then there’s a probability that the consumers with a $5 budget would prefer the rival brand over Hershey’s.

Well, I assume the above paragraphs provided you the information on Shrinkflation, so the next time you are shopping at the mall do look at the aforementioned aspect. Saying that I end this post, see you next time with a different one. Byeeee 🙂