Shopping, Advertising & Consumer Choice
Shrinkflation
Why companies sometimes shrink package sizes instead of raising prices, how it hides inflation, and what governments are doing about it.
Have you noticed that a packet of biscuits or crisps seems to contain less than it used to, while the price stays the same? This is shrinkflation: reducing the size or quantity of a product while keeping its price unchanged.
Why companies do it
When costs rise, companies must either raise prices or cut costs. Raising prices is very visible, and shoppers notice. Shrinking the package is less visible. Research suggests consumers are more sensitive to price changes than to changes in quantity, so shrinking a product can protect sales.
Shrinkflation became widely discussed during the inflation surge of 2021 to 2023, when many companies faced rising costs for ingredients, packaging and transport.
Hidden inflation
Shrinkflation is a form of hidden inflation: shoppers pay more per gram or per item without realising it. Statistical agencies try to account for it. When measuring inflation, agencies such as the U.S. Bureau of Labor Statistics and Britain’s Office for National Statistics adjust for changes in product size, so a smaller packet at the same price counts as a price increase in official figures.
Unit prices
The best protection for shoppers is the unit price: the price per kilogram, litre or item. Many countries require shops to display unit prices on shelf labels, making it easier to compare products and spot size reductions.
A chocolate bar weighing 100 grams sells for 50 rupees. The manufacturer reduces it to 90 grams but keeps the price at 50 rupees. The price per gram has risen from 0.50 to about 0.56 rupees, an increase of over 11 percent. Many shoppers will not notice unless they check the weight or the unit price.
Government responses
Some governments have acted. France introduced a rule in 2024 requiring shops to display a notice when a product’s quantity has fallen while its price stayed the same or rose. Brazil has rules requiring manufacturers to inform consumers about quantity changes on packaging for a period. Consumer groups in many countries track and publicise examples.
In most places, reducing package size is legal as long as the new quantity is accurately labelled. The concern is transparency, not deception about the stated weight. That is why unit pricing and disclosure rules matter.
- Shrinkflation reduces product size while keeping the price the same.
- Companies use it because shoppers notice price rises more than size cuts.
- Official inflation statistics adjust for size changes.
- Unit prices and disclosure rules help shoppers spot shrinkflation.
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