Shrinkflation & skimpflation: Are businesses manipulating consumers?
Food inflation, grocery shopping, eggs, groceries. Image: 123rf.com
Gugs Mhlungu spoke to Certified Financial Planner, Paul Roelofse.
Listen to their conversation in the audio clip below.
As a consumer, I am sure you have found that groceries are becoming more and more expensive and if you've been very observant, you would have noticed that some of your regular products have either gotten smaller or the quality has changed but that the price remains the same or even higher.
"You're buying what you used to buy but you are getting less for it at the same price."
- Paul Roelofse, Certified Financial Planner
The high cost of living has seen businesses resorting to tactics like skimpflation and shrinkflation to protect their profit margins, writes Roelofse in his latest article titled, 'Impact of Skimpflation and Shrinkflation on South African Households'.
He explains that "skimpflation involves reducing the quantity or quality of products without lowering prices, while shrinkflation entails maintaining prices while offering smaller products. "
"It's indicative of businesses being on the back foot and they have to reinvent themselves in some way but it kind of translates into manipulation instead of reinvention."
- Paul Roelofse, Certified Financial Planner
Roelofse says that there's a whole science in merchandising, pricing and competitiveness.
He adds that to keep a product on the shelf and give the consumer the perception that the price is still much the same but to lessen the product, is just a form of inflation.
"Inflation is here. We can't turn anymore away from it. We've got to learn to deal with it and we are struggling through it."
- Paul Roelofse, Certified Financial Planner
Roelofse stresses in his article that there is an urgent need for solutions in addressing the issues of skimpflation and shrinkflation to safeguard the economic well-being of South African households and to promote sustainable growth.
For more financial advice, visit Roelofse's website here.
Scroll up to listen to the full interview.