Downsizing, when companies give you less so as not to raise the price

Downsizing, when companies give you less so as not to raise the price

Fewer chips in the bag, that toilet paper lasts less or that room service in hotels becomes optional. These are some examples of a trend that is being seen worldwide that is called 'shrinkflation' (play on words between reducing and inflation, 'reducing' in Spanish) or when companies choose to reduce the quantity of their products instead of raise prices, so as not to lose customers.

This economic strategy was already seen a decade ago after the last economic recession and now it is resurfacing again because inflation is once again the main concern of economists. Inflation in the United States is the highest in 40 years, this increase in prices is due to a combination of labor shortages, bottlenecks in the supply chain, the increase in demand after the pandemic and the fact that Russia's invasion of Ukraine is reducing food and energy supplies, thus putting even more pressure on prices.

'Reduflation' is a more stealthy technique. In general, when it costs more for the producer to produce his product, he chooses to raise his prices, but this can make consumers switch to buying the products of the competition or private labels.

Consumer advocate Edgar Dworsky has been studying product labels since 2006 and sharing in his non-profit organization, Consumer World, the changes you see. In his 2021 report, the expert indicates that the bag of Doritos went from containing 276.4 grams to 262.2, which is equivalent to 5 nachos less; Bounty toilet paper went from having 165 sheets to 147; Crest 3D White Radiant Mint toothpaste tube went from 116.2 grams to 107.7 grams, which translates to one less tooth brushing.

Another way these reductions are seen is when the company changes the packaging of its product. As was the case with the isotonic drink Gatorade, owned by PepsiCo, which has redesigned its bottles to make them more streamlined and easier to grip, but in this change it has reduced the size of its bottles by 14%.

Some companies even justify these cuts as improvements for the consumer or the environment. For example, in England, Cadbury said the reason its Wispa chocolate bars are now smaller is to help fight obesity, but the price remains the same.

You can not only see 'downsizing' on supermarket shelves, but also in the service sector. Last July the Hilton hotel chain announced that in the United States the daily cleaning of occupied rooms will be carried out only at the request of the client (this is still free) and that the only automatic cleaning that will be done will be on the fifth day.

At Walt Disney World, the Florida amusement park from the creators of Mickey Mouse, you can also see the 'downsizing' since last summer, when "skip the line" passes went from free to $15. Additionally, Disney's Magical Express service, which allowed guests of Disney World Resort hotels to get to and from Orlando International Airport (MCO) courtesy of the theme park, was discontinued this year.

With these dynamics, it is not surprising that the level of overall satisfaction of US customers has fallen to its lowest level since 2005. “The decline began before the arrival of COVID-19, but the pandemic has accelerated and deepened it” , highlights the 2021 report of the US Customer Satisfaction Index.

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