Supermarkets and Shrinkflation: GCSE Business In the News

Have a go at this teaching activity, which includes a downloadable worksheet and suggested answers.

What's the story?

The consumer group Which? is urging retailers and food manufacturers to be more transparent about when they lower the size or change the components of their products, often known as "shrinkflation" and "skimpflation." When Which? asked for examples of this, they received a large number of comments, discovering that several items, such as tea bags and sausages, now contain less or are created with cheaper ingredients.

The British Retail Consortium noted that when the cost of producing goods rises, retailers are attempting to keep costs low for customers. However, Which? discovered other examples of products going smaller or changing their components, such as Listerine mouthwash shrunk from 600ml to 500ml while increasing in price, PG Tips tea bags coming in lesser volumes, and several snacks and spreads are being marketed in smaller packets at supermarkets such as Tesco and Sainsbury's. They also discovered that certain goods, such as guacamole and ready meals, now contain fewer of the essential ingredients, such as avocado or beef.

According to Which?, these changes are taking place at a time when food costs are extremely high, with the largest increase occurring in April of last year. They say that consumers typically spend more yet receive less. They advise that supermarkets and manufacturers be more transparent about any changes to their products and make it easy for customers to compare pricing and sizes.

According to the British Retail Consortium, these changes are primarily the result of decisions taken by manufacturers rather than retailers. They also stressed that shops work hard to keep pricing reasonable for customers and also to make sizes and prices clear so that customers can make informed choices.

Shrinklation