‘Shrinkflation’ in food: chocolate and confectionery main culprits

‘Shrinkflation’, namely the ‘shrinking’ of products whilst their prices remain the same, has long been thought to be responsible for a hidden hike in the cost of living, particularly in food.

The Office for National Statistics (ONS) has now reviewed ‘shrinkflation’ in a recent report and found between 2012 and 2017 that 2,529 products are now smaller but cost the same. 614 products had got larger.

The ONS report found that weight changes occurred most often in food products rather than any other item category. However, they held that, despite this, the phenomenon of shrinkflation had not had an impact on the overall inflation figures.

Nevertheless, for chocolate and confectionery it was different, here there was a significant effect of shrinkflation. Shrinkflation in this sector contributed 1.22 percentage points to the rate of inflation for products such as sugar, jam, syrups, chocolate and confectionery.

The reasons for this this being peculiar to this category of food is uncertain as currency fluctuations, imports and raw ingredients costings and overheads, applies across the entire food industry. Additionally ONS found no specific increase in the practice of shrinkflation since Brexit when prices of imports and currency fluctuations have hit hardest. Specifically, in this category the ‘sugar tax’ to be levied on certain soft drinks has not yet come into force (April 2018,) and costs of key ingredients such as sugar and cocoa have been low and/or falling in recent years.

One answer might be the very nature of this ‘treat’ sector, that it is an indulgence by consumers and not open to the same value shopping that may effect, for example, the standard pint of milk or loaf of bread. Also, this sector is beleaguered by the obesity debate which has actively encouraged smaller portion sizes and responsibility statements to reduce key ingredients, promotion of healthier alternatives by retailers and restaurants, as well as a general acceptance on raising prices to seek to reduce consumption of these products.

In this case, the ‘shrinkflation’ of this sector may be said to have been government endorsed.

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