Am I being cheated? Impact of Shrinkflation

Shrinkflation: The Stealthy Inflation that is Affecting the Indian Market

In recent times, many consumers in India have noticed that the prices of their favorite products are not what they used to be. The quantity of the product is decreasing, but the price remains the same. This phenomenon is known as shrinkflation, and it’s becoming increasingly prevalent in the Indian market.

Shrinkflation is a form of inflation where the price of a product remains unchanged, but the size of the product decreases. This is a common strategy employed by companies to offset the rising costs of raw materials and production while maintaining the same price point for consumers.

For example, a popular biscuit brand in India, such as Parle-G, recently reduced the size of its pack from 400 gm to 380 gm, but the price remained the same. Another well-known chocolate brand, Cadbury Dairy Milk, also reduced the size of its bars from 50 gm to 45 gm, but again, the price remained unchanged. This has caused frustration among consumers who feel that they are paying the same amount for a smaller product.

While shrinkflation might seem like a harmless solution for companies, it can have long-term consequences for consumer trust and brand loyalty. Consumers are becoming aware of this practice, and many are feeling misled and cheated.

So, what can companies do to address this issue?

1. Be transparent about the changes: Companies should be upfront and transparent about the changes they are making to their products. This can help to build trust and reduce consumer frustration. For example, Nestle India recently announced that it was reducing the size of its Maggi noodles packs, but also made it clear that the price would remain unchanged.
2. Offer alternative options: If a company is unable to maintain the size of its product, it should consider offering alternative options, such as larger packs at a higher price point. This can help to ensure that consumers are aware of the changes and have the choice to pay more for a larger product.
3. Invest in innovation: Companies should look for ways to reduce production costs and improve the efficiency of their operations. This can help to maintain the size of their products and keep prices down. For instance, Amul has invested in technology and automation to improve the efficiency of its production processes, which has allowed it to maintain the size of its products while keeping prices affordable.
4. Focus on customer satisfaction: Companies should focus on delivering the best possible customer experience, regardless of the size of their product. This can help to build trust and maintain customer loyalty. For example, ITC’s Bingo! brand has focused on maintaining high quality standards, which has helped to build customer trust and loyalty, despite any changes to the size of its products.

In conclusion, shrinkflation is becoming a major issue in the Indian market, and companies need to be mindful of its impact on consumer trust and loyalty. By being transparent, offering alternative options, investing in innovation, and focusing on customer satisfaction, companies can ensure that they are providing the best possible experience for their customers.