Shrinkflation

Shrinkflation

Shrinkflation (from “shrink” + “inflation”; Dutch: krimpflatie) is a corporate strategy where manufacturers reduce the volume or quantity of a product while maintaining the same or higher price. The packaging often remains unchanged, making the reduction imperceptible to consumers.

The term is related to skimpflation, where the quality of a product or service is reduced instead of its size or weight, without a corresponding drop in price. Both practices are considered forms of “hidden inflation” that affect consumer purchasing power.

Definition and Concept

Shrinkflation occurs when a product’s packaging remains the same—or only slightly altered—but contains less product, without a corresponding drop in price. This makes the reduction less noticeable to consumers, effectively increasing the unit price.

Historical Context

The concept of shrinkflation predates the term itself. Economists have documented cases as early as the 1970s, particularly during periods of high inflation when companies sought to avoid explicit price hikes.

The term shrinkflation gained popularity in the early 2010s, attributed to British economist Pippa Malmgren, who used it to describe hidden inflation in consumer goods.

Skimpflation is a more recent term, first gaining widespread usage in the early 2020s. It emerged after the COVID-19 pandemic, when supply chain disruptions, labor shortages, and inflation prompted businesses to maintain prices but cut back on service quality or product standards.

In both cases, periods of economic stress and high inflation tend to accelerate the use of these strategies, as seen during the global inflation spike of 2021–2024.

Prevalence and Examples

In the Netherlands, the Consumentenbond (Consumers’ Association) has documented numerous cases of shrinkflation:

• Maaslander aged cheese: Reduced from 200 g to 175 g, then to 150 g in 2023, and further to 140 g in late 2024, with prices remaining stable.
• Ariel washcapsules: Fell from 14 capsules in 2020 to 10 capsules in 2025.
• Snack a Jacks Barbecue Paprika rice cakes: Declined from 145 g to about 103 g over several years.

These incremental reductions (“shrink upon shrink”) often go unnoticed by consumers.

Consumer Response and Complaints

In 2024, the Consumentenbond’s Meldpunt Eerlijk (Fair Complaints Line) received about 250 reports related to shrinkflation. Although fewer than in previous years, this may reflect that most content reductions had already been implemented or were subtle enough to escape attention.

Industry Reaction

Manufacturers often state that retailers set prices, while they only recommend retail pricing. Some claim reductions result from product improvements or changing consumer needs—a rationale the Consumentenbond rejects.

Consumer Protection Efforts

The Consumentenbond has called for:

1. Clear labeling when content is reduced.
2. Public tracking of shrinkflation examples.
3. Legal action against deceptive practices, potentially leading to fines of up to €900,000.
4. Engagement with industry to promote transparency, though supermarket chains and manufacturers have resisted mandatory disclosures.

Related Phenomena

Skimpflation occurs when companies lower the quality of goods or services rather than the size or weight, while keeping prices unchanged or even increasing them. Examples include cheaper ingredients in food products, reduced customer service staffing, or less frequent cleaning in hotels. Like shrinkflation, skimpflation effectively reduces consumer value without an obvious price change.

International Comparisons

In France, Carrefour labels products whose contents have been reduced without a price drop. Consumer organizations in other countries, such as the UK and the US, have also raised awareness about shrinkflation and skimpflation.