Difference between revisions of "Shrinkflation"
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| − | '''Shrinkflation'' is a result of higher producer costs due to excess [[government spending]] and [[inflation]]. | + | '''Shrinkflation''' is a result of higher producer costs due to excess [[government spending]] and [[inflation]]. |
Two methods by which producers attempt to hold market share and dollar volume is by producing items that appear the same or cheaper, but aren't. The first method relies on replacing some of the contents with air. The only noticeable outward change is the package volume description. (i.e. 4 oz. instead of 6 oz.) The second method involves shrinking the packaging and reducing the price ever so subtly that it appears that the original product has undergone an amazing price cut, when in fact, no such price cut has been made, only a new, smaller, product is for sale. i.e. butter, ice cream, and other dairy products. | Two methods by which producers attempt to hold market share and dollar volume is by producing items that appear the same or cheaper, but aren't. The first method relies on replacing some of the contents with air. The only noticeable outward change is the package volume description. (i.e. 4 oz. instead of 6 oz.) The second method involves shrinking the packaging and reducing the price ever so subtly that it appears that the original product has undergone an amazing price cut, when in fact, no such price cut has been made, only a new, smaller, product is for sale. i.e. butter, ice cream, and other dairy products. | ||
Revision as of 01:48, February 19, 2024
Shrinkflation is a result of higher producer costs due to excess government spending and inflation.
Two methods by which producers attempt to hold market share and dollar volume is by producing items that appear the same or cheaper, but aren't. The first method relies on replacing some of the contents with air. The only noticeable outward change is the package volume description. (i.e. 4 oz. instead of 6 oz.) The second method involves shrinking the packaging and reducing the price ever so subtly that it appears that the original product has undergone an amazing price cut, when in fact, no such price cut has been made, only a new, smaller, product is for sale. i.e. butter, ice cream, and other dairy products.
An example of the first method:
| Jan. | Feb. | Mar. | Apr. | May. | Jun. | Jul. | Aug. | Sep. | Oct. | Nov. | Dec. | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Price | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 |
| Volume* | 100:0** | 98:2 | 89:11 | 78:22 | 75:25 | 73:27 | 67:33 | 60:40 | 48:52 | 33:67 | 22:78 | 0:100*** |
| Size | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in |
- *A ratio of product to air.
- **All product, no air.
- ***You are buying air.
Product Price and Size remain constant, internal content dwindles.
An example of the second method:
| Jan.** | Feb. | Mar. | Apr. | May. | Jun. | Jul. | Aug.*** | Sep. | Oct. | Nov. | Dec.**** | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Price | $1.00 | $1.25 | $1.75 | $1.79 | $1.99 | $2.05 | $3.10 | $3.11 | $2.43 | $2.34 | $2.32 | $2.23 |
| Volume* | 80:20 | 80:20 | 80:20 | 80:20 | 80:20 | 80:20 | 80:20 | 60:40 | 60:40 | 60:40 | 60:40 | 60:40 |
| Size | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 10x10 in | 9x9 in | 9x9 in | 9x9 in | 9x9 in | 9x9 in |
- *A ratio of product to air.
- **Initial price.
- ***Peak price.
- ****Final price after adjustment.
The final price is less than the peak price, while greater than the initial price, while simultaneously having less for that price than the initial price.