Retailers are strategically adjusting product sizes and prices, impacting consumers as they face ‘super-shrinkflation’.
- Shrinkflation involves reducing product sizes while maintaining or increasing prices, affecting major supermarkets.
- Products like McVitie’s Digestives and Penguin biscuits are now smaller yet more expensive than a year ago.
- Economic factors such as the Russia-Ukraine conflict have contributed to rising input costs for food manufacturers.
- Commodity prices continue to climb, suggesting that double-digit food inflation will persist throughout 2023.
Retail consumers are experiencing a phenomenon known as ‘super-shrinkflation’, where product sizes are reduced and prices increased concurrently. This strategic move by retailers and manufacturers has led to significant consumer impact as they pay more for less. An investigation highlighted that some grocery items have seen prices double per unit compared to the previous year, affecting renowned supermarket chains such as Tesco, Sainsbury’s, Asda, and Morrisons.
The concept of shrinkflation is exemplified in products like McVitie’s Digestives, where standard pack sizes have been reduced from 400g to 360g, accompanied by a 20p price increase to £1.80. Similarly, Penguin biscuit multipacks now contain one fewer bar, with prices increasing from £1.25 to £1.50. A spokesperson for Pladis, the manufacturer of these products, attributed these changes to inflationary pressures experienced across the supply chain, which have persisted throughout 2023.
The underlying factors contributing to shrinkflation include economic disturbances such as Russia’s invasion of Ukraine. This geopolitical event has escalated costs for basic commodities like wheat and vegetable oils, staple ingredients in popular British products. As these inflationary conditions prevail, the prices of common supermarket goods continue to rise.
Another example includes Hellmann’s mayonnaise, where jar sizes have been reduced from 800g to 600g, yet with a 14% increase in price to £3.75. Ingredients critical to the production of mayonnaise, such as olive oil and eggs, have seen substantial price hikes, with olive oil alone rising by 49% over the 12 months leading to March 2023, according to official statistics.
With food prices unlikely to stabilise soon, consumers are bracing for continued economic pressure at the grocery checkout. The persistence of high commodity costs suggests that food inflation will remain in the double digits, compelling manufacturers and retailers to make strategic pricing decisions that often, regrettably, pass on costs to the end consumer.
The ongoing rise in commodity prices and economic pressures ensures that shrinkflation remains a key challenge for consumers in the near term.
