What is “shrinkflation,” and why is this phenomenon occurring?
Manufacturers are facing increased costs across the board. Prices of raw materials, labor and transportation have surged, primarily due to rising fuel costs. To offset these expenses, companies have several options. They can increase prices, but noticeable price hikes could lead to consumer backlash. Consumers are very price sensitive, and they’ll notice if their orange juice goes up from $2.99 to $3.29 a carton. Another option is reformulating products with cheaper ingredients, but that risks compromising quality. They can absorb the costs, but that's not sustainable. So instead, many opt for a subtle reduction in product sizes, effectively implementing covert price increases that often go unnoticed by consumers.
How can consumers combat this trend?
Diese Geschichte stammt aus der May 2024-Ausgabe von Kiplinger's Personal Finance.
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Diese Geschichte stammt aus der May 2024-Ausgabe von Kiplinger's Personal Finance.
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