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Warning: Inflation could be shrinking your snacks

·3-min read
shrinkflation affecting Lays chips and cash
Avoid the worst of shrinkflation by compare prices according to weight. (Source: Twitter @Allison81094298, Getty)

It’s not just your imagination - many of your favourite snacks are getting smaller, and it’s all thanks to ‘shrinkflation’.

Canstar finance expert Effie Zahos said inflationary pressures were nudging more food and beverage manufacturers to decrease the weight of their products without lowering the price.

She said the practice was back in the news again after Cadbury in the UK announced it would cut the size of its family chocolate block, from 200 grams to 180 grams.

What was interesting about the most recent chocolate block shrinkage, she said, was: “They came out and straightaway said, ‘no, we're not decreasing price, this has got to do with inflationary pressures’.

“That’s the whole thing about shrinkflation; it is a very sneaky way of increasing prices without actually increasing prices,” Zahos said.

There are other reasons manufacturers shrink products, she said.

Regulatory changes may restrict the amount of sugar in products, for example, or disruptions to packaging supplies may force manufacturers to use different packaging.

But generally, Zahos said the manufacturers tended to decrease the size of their products to “disguise inflation” that was causing the costs of production to soar.

“I feel that this pressure for businesses to use shrinkflation as a method to keep their customers will continue for a little while due to supply chain shortages and the rising cost of producing goods,” she said.

Shrinkflation tricks to watch out for

One tactic manufacturers use is to argue the weight decrease is about portion control.

“And in some cases, it is a good excuse, but I tell you what, most people just double their consumption anyway,” Zahos said.

Another trick she’s seen is boosting the size of the washing powder scoop so consumers use up the product faster.

Shrinkflation can outpace inflation

Food and non-alcoholic beverages inflation is sitting around 1.9 per cent in Australia, according to Australian Bureau of Statistics data.

However, Zahos said shrinkflation, “can be a lot more aggressive than that”.

“When you realise that 20 grams of chocolate means a row of the chocolate bar gone, it can get a lot harder,” she said.

She said consumers could avoid shrinkflation through unit pricing.

This compares products like-for-like, based on their actual weight.

She said this was particularly easy online because most online stores allowed customers to filter unit prices from lowest to highest.

“You will see the cheapest from the dearest, regardless of the size or packaging,” Zahos said.

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