When I'm invited to speak with college and graduate students about pricing, nothing gets the audience more fired up than shrinkflation. People hate it!
IAs a Chicago guy, I think of everything in terms of pizza 🍕. Remember when deep dish was hefty? Nowadays, it's like they took a slice our of your slice. They charge the same dough for less dough, if you catch my drift. Ba dum tss 🔔
If you're used to paying $15 for a pizza, you'll notice when the price goes up to $20 and may consider getting a sandwich instead. In pricing terms, this is called anchoring. Instead of raising the price and risk upsetting customers, companies will hold steady at $15 but shrink the product.
This "works" because people are used to paying a particular price point for one unit of the product. The sneaky thing is that the unit changes. Rather than an 18-inch pizza, I get 16-inch. I still get a pie for $15, I just get a lot less of it.
I don't see shrinkflation as frequently in B2B because products specs can't just change willy nilly. If I need a 1/2 hp motor for my manufacturing line, I can't just slide in a 1/4 hp motor without potentially causing major headaches.
Anyway, Planet Money from NPR just wrote a fun article about the topic if you want to learn more: https://lnkd.in/ggC-p67h
#inflation #pizza #NPR
The Oil Baron delivering healthy alternatives at Fussels Fine Foods | Sales | Production
9moVery pleased to number amongst those 4000 lines, Holleys Fine Foods= great business