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Strategies beyond Shrinkflation

How brands and retailers can avoid the naughty shelf
READ TIME: 3 mins 30

Creative, Graphics
Technology, Legal

October 2023

Shrinkflation, skimpflation… we’ve heard it all!  Buzz words in national press giving rise to increased consumer despair. What are some brands doing to retain market share? And what else could they be doing which is more sustainable and less damaging?

Andy Johnson, our Commercial Director, investigates some of these tactics to understand what strategies will stand the test of time; maintain customer brand loyalty and ensure brand stability, if not growth.

UK grocery inflation has dropped for the seventh month in a row to 11% according to Kantar, but many households continue to struggle with Citizens Advice stating that one in four people in the UK are currently behind on at least one bill.

With the cost of groceries under scrutiny, supermarkets are looking at different ways to deliver value at the checkout. We’re seeing a push in loyalty schemes, branded promotional campaigns and a switch to own label as a response to the wallet squeeze. However, there are other tactics in play, that aren’t necessarily in the customers’ best interests.

You’ve heard about shrinkflation, where some brands reduce pack sizes. The most documented of these is probably Quality Street tins, where The Sun quoted a gradual reduction of approximately 110 to just 62 sweets in a tin/tub between 2009 and 2022.

Shrinkflation is a hot topic, with Carrefour, France’s second biggest supermarket, now exposing Shrinkflation brands to shoppers. As revealed in the Mail Online, Carrefour have highlighted 122 big brand products who have both reduced pack size and increased price.

Carrefour shoppers can now easily identify Shrinkflation brands at point of purchase, with signage at shelf edge stating:

This product has seen its weight decrease and the price charged by our supplier increase.

Carrefour shelf edge customer sign

These brands are in effect being put on ‘the naughty shelf”.

Many of these products are also sold in the UK.  Very worrying for these brands now that Rami Baitieh, ex Carrefour Chief Exec, has taken over the reins at Morrisons – could it be that we see this tactic appear on UK shelves soon?

Mainstream media are interested, firing up consumers and depleting brand reputation. The BBC reported that the Galaxy brand has secretly slimmed down its chocolate bars. They were 110g but are now 100g.  Last October, the recommended retail price for a bar of Galaxy chocolate was also raised from £1.39 to £1.50. Not much empathy or mention in the media about the increase in cost of raw materials; with the price of sugar hitting its biggest peak in over a decade.

Reducing the size of our products is not a decision we have taken lightly but it is necessary for shoppers to still be able to enjoy their favourite Galaxy treats without compromising on quality and taste.

Response from Galaxy

No compromise on quality and taste for Galaxy…which brings us nicely on to ‘Skimpflation’.

Some other brands and retailers are taking a different approach to maintain their margins; by substituting some of their more expensive ingredients for cheaper alternatives, such as reducing oil content in margarine and replacing it with water or reducing ready meal meat content and replacing with vegetables.

Will consumers notice? Expect backlash when they do. See some of the hype that has hit the headlines already:

Skimpflation is the latest neat trick from the multitrillion-pound food industry, where recipes are quietly tweaked, or ingredients downgraded in a bid to keep costs down. Yet, in many instances the products still cost the same – or worse, even more than they used to. This sort of sneaky behaviour is risible at the best of times but when grocery bills have gone through the roof it is unforgivable.

Ben Marlow in The Telegraph

Whilst I’ve not seen or heard evidence that these tactics work in the short or long term, I suspect that they go nowhere to build trust in any brand, even when they are communicated openly.

Consumers are feeling the pinch and becoming increasingly agitated. Surely now is a time, when so many brands are experiencing stagnant growth at best, that building trust and brand loyalty is a top priority.

At Sun, we go back to basics when it comes to helping brands to counter the effects of inflation and the cost-of-living crisis, in regards to their brand packaging and design to print process.

We are actively talking to brands about how they can streamline their processes; increase their speed to market and reduce their cost to market.

We help through the application of innovative technology, by re-appraisal of their designs and the entire design roll-out process. By making improvements, brands will see incremental wins which will better enable them to sustain their margin, without losing face and impacting loyal customers.

This has worked for many of our clients and will work for many more – in our experience it’s a far more sustainable enabler for brand growth.

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