Market’s ‘shrinkflation’ tricks

How food companies try to maintain the same prices with no major impact on customers

Market’s ‘shrinkflation’ tricks

A large Greek dairy company has plans ready for the packaging of its yogurt to contain 180 grams of product instead of the 200 gr it currently contains. Another Greek food company is planning to reduce the quantities in its frozen vegetable packs so that instead of a kilo of frozen okra, they contain 900 grams.

The quantity may be decreasing, albeit imperceptibly for most consumers, but the price will remain, at best, the same. This is the famous “shrinkflation” phenomenon which has already made an appearance widely abroad and is now heading for the Greek market as well.

“Through this practice, companies seek on the one hand to maintain profit margins and on the other to prevent new price increases,” an analyst at a well-known market research company tells Kathimerini. He adds, “What companies are most afraid of is that by keeping the same quantities in the packages, they will be obliged to implement new hikes, otherwise their profit margins will be further squeezed and they will be left out of the basket, losing sales and market share.”

Another scenario that food and non-durable consumer goods companies are considering is the reduction of packaging, but keeping the same amount inside them as before. For example, potato chips take up about a third of the package they are in, as is the case with cereal boxes. The reason for this is that “with larger packages, companies made an impression on the shelf, took up more space and ultimately aimed to push competing companies and products off the shelf,” a supermarket industry executive points out.

Both new practices are not easy to implement and above all come at some cost. This is because conversions are required in production lines, as well as the ordering of new packaging materials and changes in the printing matrices of the data on the packaging.

Reducing quantities while maintaining the same prices has also been noted at several restaurants that are reducing their portions – especially if it comes to appetizers, such as fries and salads.

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