‘Shrinkflation’: the new scam to watch for at the grocery store

Supermarket companies are using the sneaky tactic of keeping prices the same while gradually downsizing product sizes.

Referred to by experts as “shrinkflation”, where serving sizes of grocery products are smaller while prices stay the same.

“You don’t notice that you’re paying more,” InvestSMART’s Evan Lucas said to Nine News.

“So it’s actually inflation by stealth.”

Brands like Maltesers, Smiths chips, Pringles, Cadbury chocolate and Weetbix have all allegedly participated in inflation by stealth.

Lucas suggests that if the weight of a product isn’t at a whole value, customers can expect less bang for their buck.

For example, Nine news found a Weetbix value pack used to offer 1.5kg of product, but now just offers 1.2kg of the breakfast cereal.

So @ChrisKohler are having a debate about which brand or item(s) will go through shrinkflation first…

I think Weet-Bix – that ‘1.2kg value pack’ has ‘1kg value pack’ written all over it.

Any other guess? #ausbiz #shrinkflation #stealthpricing #behaviouralfinance

— Evan Lucas (@EvanLucas_INV) March 14, 2022

Queensland University of Technology retail expert Dr Gary Mortimer says that while many Australians will see this tactic as deceiving, he argues that it could actually help ease the strain on households.

“Retailers are very cognisant that families are doing it tough. Fuel and rent prices are going up, and the cost of electricity. The last thing families want is for food prices to go up,” Dr Mortimer said to news.com.au.

“By giving you a little less, maybe 25 or 50 grams, you can still essentially get the majority of the product [without paying extra costs].

“If you extrapolate that small amount of product across tens of thousands, if not millions, of units, it actually holds those costs in line and doesn’t have a massive impact on the retailer’s margins, or the retailer’s costs.”

Mortimer believes if companies didn’t implement the “shrinkflation” strategy, household budgets would be pushed to their limits.

“What we’re going to see in the next 12 to 18 months is slightly inflated food and grocery prices, somewhere between three and five per cent,” he said.

“Shrinkflation is probably one strategy that we will see become more readily applied so that it doesn’t have a significant hit on the household bottom dollar.”

With rises to the cost of living following the recent global events, maintaining household budgets is becoming a hot button issue.