Economist reveals the subtle ways Australians are experiencing “shrinkflation” — “You don't realise it's happening”
- Replies 7
We're sure that most of our members here at the SDC are already familiar with the term "shrinkflation", a phenomenon where companies trim down the sizes of their products to sell them without decreasing the cost.
As it turns out, more and more grocery items are being hit by this vexing phenomenon as the skyrocketing fuel prices and supply chain issues impact the production and transportation of most essential goods.
New reports suggest that some of Australia's favourite goods have been subtly shrinking.
It was said that the products affected include the new Tim Tams varieties, which were reduced from 11-biscuit-a-pack to 9 biscuits, Freddo Frogs, which were slimmed down from 15g to 12g, and Smith chips, which formerly weighed 200g and now weigh 170g.
Other treats that subtly shrunk include Pringles which now weigh 165g instead of its original 200g and Fun-size Maltesers which have been trimmed down from 144g to 132g.
Additionally, it was said that toilet paper — one of the most hoarded items during the first few months of the pandemic — has been experiencing shrinkflation, with US multinational Kimberley Clark in 2016 reportedly admitting to retailing slimmed-down versions of its rolls from 11cm to 10cm.
Australians are subtly experiencing inflation on some items despite the fact that their prices stay the same, according to economist Evan Lucas. Credit: AAP Image.
Investment Smart chief market strategist Evan Lucas described the sly practice as "inflation by stealth".
"It is literally inflation happening by changing the volume or the weight of what you're buying, but the price stays the same," he told The Project on Sunday night.
"It's a mental thing - a psychological thing. You don't realise it's happening."
Australians have unknowingly been purchasing "shrinkflated" items in the past few weeks, as shrinkflation became "more aggressive" than standard inflation, according to Mr Lucas.
He said: "If you look at inflation right now, it's very high in food - about seven to eight per cent."
"But if you think about it in loss of weight of products, that's not seven or eight per cent. That's 10, 12 and even as much as a 20 per cent reduction in weight for the same price."
The economist also predicted that the next items that could experience massive shrinkflation are grain products, such as wheat and corn, as 30 per cent of global supplies come from the Black Sea, which lies on Ukraine's southern rim.
Grain products and vegetables were predicted to experience massive price hikes in the coming weeks. Credit: Shutterstock/haireena.
Aside from the fact that the Russia-Ukraine conflict caused massive petrol price hikes, the production and exportation of vegetables and grain have also been impacted as the Eastern European region is a major exporter of the aforementioned products.
Prime Minister Scott Morrison addressed this looming price hike in his speech at the AFR Business Summit earlier this month.
"Food and grain prices are rising, which will pose challenges to lower-income economies, including many in our own region," he said.
"Commodity price rises will be the most obvious transmission channel to Australia. Petrol prices in Australia have risen like they are elsewhere."
The SDC team vows to provide you with updated information on the rising market prices, as well as money-saving tips, so you can plan your budget ahead of time. We recommend visiting the Money Saving Hacks thread for more information on our tips.
Have you noticed the effects of shrinkflation on you groceries? Share your thoughts with us in the comments below.
.png){kind=icon}
