Consumer Pulse | October 31, 2024 | Trick or Shrink? How Shrinkflation Haunts Your Favorite Products

What's happening:

Shrinkflation, the practice of decreasing product sizes while prices remain the same, has become a growing concern for consumers. With inflation pressures impacting production costs, companies see shrinkflation as a way to maintain profitability without raising prices outright. However, with growing consumer awareness of the practice comes the potential for erosion of trust and brand loyalty. 

What we found:

• The majority of consumers (73%) have noticed shrinkflation occurring in the products they use over the past 2 years.
• Among those who have taken notice, the most common category where people see the practice occurring is food and snacks, at 88%.
• As a response, nearly half (45%) of respondents cite that seeing a brand engaging in shrinkflation makes them lose trust and less likely to purchase from them. 54% have reported acting on this perception and switching to a brand entirely different from the one that they feel offers a better value. 

Why it matters:

With most consumers keeping a close eye on shrinking product sizes, brands need to consider how this awareness can impact purchasing decisions and brand loyalty. In the short term, many brands see shrinkflation as a quick fix to keep prices low while managing the rising costs of raw materials and production. By reducing product sizes without raising prices, brands aim to maintain profitability without deterring price-sensitive customers. However, this tactic can lead to long-term effects that can result in diminished brand trust and loyalty, as consumers increasingly feel misled or undervalued. The challenge brands and manufacturers face is striking the balance between maintaining profitability while also not alienating consumers. 

To mitigate negative feedback, brands should focus on transparency. 57% of respondents would prefer that brands keep the size of the product the same but increase the cost, rather than engage in shrinkflation. Clear communication about price changes or product size adjustments can help brands find that balance and differentiate themselves in a market where brand trust is increasingly fragile. 

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