Inflation, shrinkflation, skimpflation, three big trends in consumer goods that could completely change the way we buy and consume things? All three of these inflationary things hurt our pocket books and will affect our shopping experiences.
We, as consumers, are increasingly concerned with price. Inflation rose at its fastest pace in over two years in April, hitting well over 8%. The highest in over 40 years. We may be on the verge of hyperinflation and it looks certain we may go into a recession very soon.
As inflation continues to rise, you are constantly looking for ways to stretch your dollar. But what happens when there’s less money to go around? Due to changes in manufacturing, supply chains, and supply and demand, inflation, shrinkflation and even skimpflation has enter the big picture.
As inflation continues its quick march upward, it’s important to be vigilant against the insidious effects of “shrinkflation” and “skimpflation.”
Defining inflation is important because it helps you understand what you’re really facing. Inflation is a simple concept: prices go up. However, the definition of inflation is different depending on who you ask, and the two most common forms are shrinkflation and skimpflation. Let’s define each one for you.
What is Inflation
Inflation is defined as “a rise in prices, wages, and other economic costs.” In other words, inflation is when the cost of something increases over time. An increase in inflation means that you are paying more for what you bought today than you did yesterday. The opposite of inflation is deflation, and in this case, refers to a decrease in the rate of price increase. I would not count on a decrease. I’ve found once things go up they tend to stay higher than they were when they started to rise. They may go down a little bit but will not get to where they were.
Inflation is usually caused by an increase in demand for goods or services. Obviously this would include the supply chain which has been messed up the past 6 months. When we cannot get what we want, the demand goes up along with the price. I am sure you have heard it before “supply and demand” tends to dictate the end price. Of course, as we all want a big raise the price also goes up. When a business has to pay their hired help more money, that money has to come from somewhere. Guess what? It comes from the consumer. The business has to charge more for their product to pay for the higher cost of their employee.
What is Shrinkflation
Shrinkflation is a term that was coined by a group of researchers who used it to refer to the phenomenon of retailers shrinking their product sizes while maintaining their prices and making the product seem like it’s the same size but cheaper. Shrinkflation is a tactic that is used to increase profits and increase market share at the expense of customer satisfaction.
Shrinkflation has been going on for years. For years, my wife and I, bought our coffee in 2lb containers. Then one day while opening one of the containers, to make a good pot of coffee, I noticed that it was marked as 29ozs. That’s 3ozs short of 2lbs (32ozs). Same size container with 3ozs less coffee. So fill a little over 9.5 containers and we have an extra container. To make matters worse, the price remains the same or actually goes up a little bit. Less coffee for the same amount of your hard earned cash. We are seeing a lot of shrinkflation going on in 2022. Toilet paper. tissue paper, paper towels have fewer sheets on a roll. Can goods all of a sudden are 12oz instead of 16oz. The list goes on and on. Take a look at some of your pantry items and compare the weight of the new ones you are buying. You might go into shock so make sure you are sitting when you compare.
What is Skimpflation
There are a ton of different ideas and definitions of what skimpflation is. So I am going to give you my thoughts on it rather than someone else’s definition. Many associate shrinkflation and skimpflation together. Just different people saying the same thing calling it different names. Not my thought at all.
While skimpflation is similar to shrinkflation it is also very different. Have you ever eaten at a new restaurant and loved the meal? When you go back the next time it is just as good. Then a few months later you go back and, even though it is the exact same meal, it tastes totally different and not near as good. That is because they had to lower the quality of the ingredients to actually make money, or at least make a larger profit. That is what I call Skimpflation. Skimp on the ingredients and keep the price the same.
Here is a personal experience. I sell Fishing tackle and lures online. My store is https://www.CodaicenFishing.com and I also sell on Amazon under the brand Codaicen. Some of my products are plastic soft stick worms which I source through bait makers in the USA. My main supplier made some fantastic worms that were of high quality and sold well because of it. All of a sudden one day I received my order from them and I could tell immediately the worms were different. They were cheaper looking and not near as soft and pliable as they were. I called and asked what happened. Their answer, “We changed the plastisol we use in our worms.” They had decided to buy from a different company that saved them a considerable amount of money. Unfortunately, it showed up in the quality of the worms. I asked them if they would change back and they said no. This new plastisol saved them considerable money and they liked that. I refused to sell this inferior bait and found another supplier. It really was a God send for me because the new supplier had a better worm than the old one and it was actually less expensive than what I was paying. So a win/win for me. Basically my old supplier did a skimpflation and lost out on my business.
So skimpflation is when a business lowers the quality of their products to save and make money.
What You Can Do About Inflation, Shrinkflation, Skimpflation
Inflation is the increase in prices. Shrinkflation is the reduction in quantity. Skimpflation is the reduction in quality. All three of them affect your consumer goods. Here are a few ways to deal with inflation, shrinkflation, skimpflation in your daily life.
Dealing With Inflation In Your Daily Life
If you don’t know what to do with your money, then you’re in the same boat as most people. With the rate of inflation today, currently 8.6% at the time of this writing, We all spend too much, we all have trouble saving. There’s no easy fix. But there are some tactics to help us get a better handle on our finances during this inflationary time we live in. The first is to keep track of how much money you’re spending, and if you can, what it’s being spent on. If you’re buying a lot of junk food, stop buying it, junk food is usually more expensive. If you spend a lot of money on movies, cut back, rent a movie at home instead of going to the theater. If you spend too much money on clothes, try getting a better deal, or go on sale. It’s not fun to think about, but when you get a better handle on your spending, you’ll be better prepared for the future.
The second thing is to start saving now. (How to Prepare For Inflation by Saving Money in 2022) You don’t have to save a huge amount, but even if you save $10 every month, that’s a $1,200 a year. That’s nothing to sneeze at. If you’re a teenager or college student, you probably don’t have a lot of extra money to spare right now, but if you’re an adult with a job, you can probably find ways to put some money aside each month. Start with $10 a month, and keep saving as much as you can. When you get a little bit of extra money saved up, start putting some of it into an IRA. IRA’s are great because they’re tax free. It’s like having money invested for you. You won’t earn much interest on the money at first, but you can deduct the money you put into it from your taxes. It’s also good to start saving for retirement early in life. If you have a 401(k) at work, that’s even better, because you don’t have to pay taxes on the money you put into it. If you don’t have a 401(k) at work, you should consider starting one. And of course an emergency fund is super important.
Dealing With Shrinkflation In Your Daily Life
Shrinkflation happens when you buy something, and realize it’s just not as much quantity as it used to be. You might find yourself saying, “I don’t understand. Why did I pay $1.99 for 12oz when it used to be 16oz at the same price?” As we said that is what shrinkflation is, a lower amount of product for the same old price.
We all notice inflation when we go to the gas pump. When we head into the grocery store and find our $100 weekly grocery bill jumped to $200.
However, when you are in the grocery store, you may also find that your products are shrinking in size but not in price. And even if we do notice, we have no idea what we can do about it. This has been going on for years, we just seem to notice it more as we go through this high inflationary times. So what can we do about shrinkflation?
First, Shrinkflation Is Not Illegal
First things first: It is not illegal for a manufacturer to change the size of their products. So it is lawful for them to change their 16oz packaging to 12oz or their 400 sheets of toilet paper on a roll to only 360 sheets on the roll. They can do that as long s they don’t falsely claim there is more than what actually is. So they cannot package 12oz and say it is 16oz. So we are stuck with what they make. Or are we? Unfortunately, many of us just do a “suck it up buttercup” attitude and keep buying the same old stuff, even if it is a lower quantity.
Shop Around When Dealing With Shrinkflation
That’s correct. Just because we have aways bought “that” brand does not mean we still have to buy it. Look at the product sitting on the shelf next to the one that has shrunk. If a competitor is still selling the product at 16oz and your old brand has change to 12oz buy the larger one, assuming the price is right. The way I look at it is if they were not loyal to me why should I be loyal to them. After all, they lowered the quantity not me. I’ll buy the other brand and get more product for the same price. I also don’t see why we cannot dropped them an email and let them know we’ve switched brands and why.,
Dealing With Skimpflation In Your Daily Life
Remember what I said skimpflation was? “Skimpflation is when a business lowers the quality of their products to save and make more money.” That’s my definition during this inflationary period we are currently in. At least that is the way I see it.
First, Skimpflation Is Not Illegal
While lowering the quality of your materials or ingredients is not illegal it certainly is unethical. Here again, this is my thought on the subject of skimpflation. When a company or restaurant builds up their quality to make sales and gain a following and then slowly changes the quality to make a larger profit, I say that is just plain old wrong! Raise the price if you have to but don’t skimp on the quality.
Shop Around When Dealing With Skimpflation
Just like with shrinkflation make sure you shop around when confronted with skimpflation. Unfortunatley, with skimpflation, you cannot always tell right away if the item is now an inferior product. When it comes to restaurant food or your favorite snack only taste will tell. Simply change to a better restaurant and snack if they go downhill in taste.
Sometimes, when it comes to a particular product, you won’t know until days, weeks, or even months later when it does not hold up like it used to. Maybe they have changed the metal pieces to cheaper plastic pieces and it not only shows when you look at it but also does not last. Make no mistake, metal is not always better than plastic. Sometimes the plastic pieces work better and last longer and even look better. But if the quality is already good why lower it just to make a little more money.
Final Thoughts on Inflation, Shrinkflation, Skimpflation
In conclusion, these three big trends to watch in consumer goods, may have a dramatic impact on the retail industry as a whole. The first of these is inflation, as measured by the consumer price index. With all the money that was thrown at Covid-19 stimulus packages people began spending like crazy buying stuff that they most likely would not have purchased. This pushed the supply and demand up and one thing after another and we are in record territory of inflation. Of course when those prices jump like they have for gas and groceries we start seeing more signs of shrinkflation and skimpflation emerge.
What should we do about it? don’t get complacent and think that this is just the way it is. Do something about it, don’t just accept it as the new normal. Maybe we should get angry about it and watch how we shop and get picky rather than to just get taken. Don’t let the manufacturers get away with it without voicing your opinions on the subject matter of inflation, shrinkflation, skimpflation. By all means let your pocket book speak for you when it comes to your purchases. The manufacturers listen to your spending.
[…] and cost of workers. I have also noticed that the food is not as good and there is less of it. Inflation, shrinkflation and skimpflation has been forced upon restuarants because of the high cost of help and […]