Yahoo Finance Expert's take on Aldi's subtle 'shrinkflation' tactic sparks debate: 'Keeping prices low'
A retail expert has provided an interesting explanation for why products seem to be getting smaller and smaller.
Australian Aldi shoppers have said a subtle change to a popular product highlights the store's ongoing "shrinkflation" strategy.
However, retail expert Professor Gary Mortimer, told Yahoo Finance that reducing the size of products is often the only way supermarkets can absorb increasing manufacturing costs, while keeping prices the same, so if consumers want to avoid higher prices they may just have to accept some "shrinkflation".
The debate started when an Aldi shopper noticed a pack of Turkish bread had shed 50g when three large rolls were replaced by four smaller ones, while selling for the same price.
The supermarket's home brand Baker's Life Turkish Bread Rolls, which have been repackaged and renamed Turkish Rolls, went from a 450g pack of three to a 400g four-pack with the added ingredients of nigella and sesame seeds, but remained priced at $2.69.
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“Shrinkflation in Aldi once again,” the shopper claimed.
But Mortimer said that's not quite the case.
"What we are finding is that supermarkets and manufacturers tend to look at ways they can reduce costs while keeping prices low, such as reducing content whilst maintaining the same cost and retail price. Most customers don't notice when you're dealing with 50g."
He said higher production costs had to be absorbed in some way, so making portion sizes smaller while keeping prices the same was one way to reduce the pain at the checkout, while customers generally seemed happier having slightly less in a packet rather than paying more for the product.
Mortimer said “shrinkflation” was nothing new.
"Manufacturers have engaged in content reduction strategies for many years," he told Yahoo Finance. "We could look at brands like Cadbury's which have been known to shrink the size of the chocolate."
Always be on the lookout for 'shrinkflation', expert says
Finder personal finance expert Sarah Megginson told Yahoo Finance budget savvy customers were "catching on" to shrinkflation tactics, and often expressing their frustration online.
“There are ways to tackle shrinkflation and make sure you’re getting the most value out of what you’re buying. However, it really puts the onus on you as a consumer to be on alert.”
She said to remain vigilant and always read the product label. Also, try a generic or alternative brand and stock up when items are on sale.
Chris Ford, from Compare the Market, told Yahoo price rises were hurting customers but many people didn’t realise production costs were increasing, which were being passed on at the checkout.
This included transportation costs and in some cases there were other factors including supply chain issues or natural disasters which could impact on the availability and cost of goods and ingredients.
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Aldi changed product to meet consumer demand
When contacted by Yahoo Finance, Aldi confirmed there had been a configuration change of the product from three to four rolls to meet consumer demand, alongside the addition of nigella seeds, which resulted in a unit pricing change. The retailer said that Aldi stores have transparent unit pricing of cost per 100g on all shelf labels.
In her original post, the shopper wrote: “Shrinkflation is real. This post was more to spread awareness than complain, but I think a 50g drop in the product’s weight in one go is quite excessive, no matter how anyone justifies it!
“Say there’s 20 packs in a tray, for example, that’s 1kg less that they are selling for the same price as the week before. Gives you something to think about.”
Her post was flooded with comments, with many saying the taste had also changed.
“Massive difference! I wasn’t at all impressed when I [saw] these myself yesterday,” one wrote.
“Oh dear, we are doomed. Everything is shrinking. They think we are stupid. Everything getting smaller and prices are up," wrote another concerned shopper.
