Have you ever felt your Pringles getting smaller? There might have been an experience that felt embarrassing, seeing the product shrink in size despite being priced the same as before. Not just Pringles, but also products like snacks, bread, drinks, and even detergents that we consume regularly. Products that have significantly reduced in size compared to just a few years ago continue to maintain consistent sales rates, even with negative feedback from consumers. There seems to be no suitable replacement for these products.
We call it "shrinkflation," a combination of "shrink" and "inflation," where prices remain the same, but the quantity or size decreases over time, indirectly causing to raise prices. The term gained popularity when British economist Pippa Malmgren highlighted price hikes by Coca-Cola and Pepsi achieved by reducing the size of a can, coining the term "shrinkflation." This phenomenon, which has been slowly occurring in the past, has become more extreme in recent years. The difference is increasingly evident to consumers, degrading not only consumer confidence but also reducing the demand for goods, and it poses a challenge for businesses engaged in high-risk, high-return ventures. A notable example is Doritos, a famous snack company, which reduced its product size from 9.75 ounce to 9.25 ounce without much notice while maintaining the same price.
Similar to this, there is a phenomenon known as “skimpflation,” characterized by a noticeable decrease in the service or quality of a product while maintaining the same price. For example, this occurs when a hamburger replaces expensive cabbage with cheaper cabbage to reduce costs.
As “skimpflation” and “shrinkflation” become more serious, some countries are implementing policies to address them. The Brazilian government is implementing a plan to specify the capacity before and after a product change on the product's surface, making it easily recognizable for consumers when there is a change in raw materials. In Korea, plans have been announced to improve the distribution structure, reduce inflation, and impose fines of up to $22,400 (Korean won 30,000,000) for reducing the quantity or quality of products without proper labeling.
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