Nearly three-quarters of consumers are becoming increasingly cognisant of ‘shrinkflation’, whereby brands reduce product sizes while raising prices.
- A Barclays survey reveals that chocolate, crisps, and biscuits are the categories most impacted by this trend.
- Many consumers, about 21%, are changing their purchasing habits in response, opting for brands that maintain product sizes.
- Economic factors, notably the conflict in Ukraine, are driving production cost increases, exacerbating shrinkflation effects.
- Supermarket spending behaviours are shifting, with a notable percentage of consumers bulk buying and frequenting multiple stores to save money.
Nearly three-quarters of consumers are becoming increasingly aware of ‘shrinkflation’, a practice where retailers reduce product sizes while raising prices. This phenomenon has been highlighted in a recent survey conducted by Barclays, particularly affecting products like chocolate, crisps, and biscuits. The survey indicates a significant rise in consumer awareness, with more individuals noticing changes in their regular grocery items.
In response to such practices, approximately 21% of consumers are altering their shopping habits. They are choosing brands that have not reduced the size of their products, indicating a shift in consumer loyalty based on product integrity. This change reflects a growing trend among shoppers prioritising value over brand familiarity.
Several economic factors are contributing to the rise in shrinkflation, prominent among them being the Russia-Ukraine conflict. This geopolitical tension has escalated the cost of commodity crops such as wheat and vegetable oils, essential ingredients in many popular biscuits. Consequently, manufacturers are passing these increased costs onto consumers, leading to a noticeable impact on retail prices and product sizes.
Consumer spending behaviours are also adjusting in response to these economic pressures. Card spending in supermarkets observed a decline to 5.2% in July from 9.8% in June. A significant portion of consumers is buying in bulk, and about 41% are shopping at various stores to maximise savings. These strategies indicate a strategic shift by consumers aiming to mitigate the effects of rising food prices.
The impact of shrinkflation on the grocery sector underscores the complexities of global commerce under current geopolitical and economic strains. The observable shift in consumer behaviour reflects a strategic adaptation to persistently changing market conditions.
The awareness and adaptation of consumers to ‘shrinkflation’ highlight the ongoing challenges faced in today’s fluctuating economic landscape.
