Honey, I Shrunk the Goods: The Story of Shrinkflation, Skimpflation & Excuseflation

Standing in a queue at the checkout counter, I browsed the rack displaying an assortment of mouth fresheners and small snacks. That’s when I noticed that Happydent, a chewing gum that used to retail for 10 bucks five years ago is now priced at Rs 25. That’s a 150% price rise. I’m sure that beats inflation by a mile.

Happydent isn’t the only one hiking prices citing higher costs. Some take less obvious routes to arrive at the same outcome. That’s where shrinkflation, skimpflation and excuseflation come in.

These phenomena are not new even though shrinkflation had its moment in the limelight thanks to an ostensibly unscripted remark by President Joe Biden in his 2024 State of the Union address. Biden remarked on how there were fewer snickers bars in a party pack. Politicos snickered (forgive the pun) at Biden’s late awakening to the issue of shrinkflation but frankly, late or not, it’s still an issue for people dealing with an ever-rising cost of living.

Let’s break down what each of these terms mean.

WHAT IS SHRINKFLATION?

Shrinkflation is when a company reduces the quantity or size of a product while keeping the price unchanged. For example, Orbit now sells five pieces of chewing gum instead of six for the same price. The same could be said about a ketchup bottle that looks the same as earlier but contains 20 ml less ketchup, or instant noodles that weigh less.

In other words, manufacturers downsize products to offset higher production costs but keep retail prices the same, hoping to trick customers into believing that things remain unchanged.

One way to achieve this is to change the packaging in a way that distracts the consumer from noticing the reduction in quantity or by including more air in the package as has been the case with packaged air also known as Lays potato chips!

WHAT IS SKIMPFLATION?

Skimpflation focuses instead on reducing the product’s quality rather than the quantity while maintaining the same price. This can be done by using low-quality ingredients or cutting down certain aspects of the product or service.

Whether it is lower-grade coffee beans blended with Arabica beans being passed off as 100% Arabica or a hotel cutting costs by offering less frequent housekeeping or not providing free WiFi, it all falls under the umbrella of skimpflation.

In fact, brands sometimes may even increase prices while cutting quality. So, what you get is the opportunity to pay more for lower-quality goods. This has an added advantage for the company because these products, especially appliances, don’t last as long as they should, resulting in increased demand caused by replacement purchases. That’s planned obsolescence, which is a topic for another post.

WHAT IS EXCUSEFLATION?

First, it’s a very clumsy term. How about we call it shamflation? That rolls off the tongue a lot easier and keeps the alliteration going.

Excuseflation, or shamflation, as I like to call it, is when companies raise prices and blame it on inflation. For instance, as soon as the Russia-Ukraine war erupted, global oil prices sky-rocketed. Indian oil-refining companies, however, procured oil from Russia at lower rates. Fuel prices were hiked regardless, and have remained at roughly those levels ever since.

The average Joe continues to pay through his nose while the fat cats purr happily all the way to the bank.

BUCKING THE TREND

Are there any exceptions to this trend? I’m sure there are, but not too many. A few weeks ago, I watched a report about Arizona Iced Tea. The company’s owner, Don Vultaggio spoke of not wanting to increase the price of their cans despite an increase in the cost of ingredients. Even the price of aluminium used to make their cans has doubled over the years.

Photo Courtesy: AriZona Iced Tea Facebook Page

Arizona Iced Tea was launched in 1992 and priced at 99 cents. The brand has kept their prices steady for the most part, barring a few variants. They did, however, reduce the size of their cans from 24 oz to 22 oz. But it’s vital to keep in mind that if the price of Arizona Iced Tea cans were adjusted for inflation, those cans should cost $2.30 today. That’s more than double.

Keeping the price at 99 cents for more than three decades despite competitors raising prices is no small feat and worthy of appreciation. That its parent company, Arizona Beverages is privately-owned probably has something to do with it. Most companies with shareholders are usually more focussed on boosting shareholder profits than serving their customers.

CONCLUSION

That’s the story of shrinking products and soaring prices. While there isn’t much customers can do with phenomena as wide-spread as this but being aware of the manipulation is a step in the right direction. Also a good idea is calling it out in person and on social media. #shrinkflation