'Everyone is doing it': shrinkflation duping shoppers

From manufacturers to supermarkets, “everyone is doing it”, duping shoppers with marketing ploys and mind games to disguise rising prices.

Nitika Garg, professor of marketing at the UNSW Business School, says shrinkflation, when packet sizes fall and prices stay the same, relies on shoppers not twigging to what is going on.

“It’s a psychological phenomenon, where if the change in a product is below a certain threshold, people don’t recognise that a change has happened,” Professor Garg said.

“People don’t realise they are getting less or paying more for less.

“That’s what is happening in our marketplace right now.

“Everyone is doing it. The producers are doing it and the supermarkets as producers of packaged goods are also doing it.”

Prof Garg said many shoppers might not realise what was happening to their groceries if they were not closely watching prices and quantities from week to week.

She said it was a common strategy manufacturers and retailers employ when they don’t want consumers to worry about paying more and was often hidden by a marketing concept called “just noticeable difference”.

To crack down on the practice, the federal government will implement a stronger unit pricing code, which will allow customers to compare the cost of goods by weight or volume.

Supermarkets that breach the enhanced code will be slapped with large penalties.

The measures come after the consumer watchdog was given $30 million to investigate supermarket malpractice.

A spokesman for Coles said the company was committed to keeping prices low at its stores.

In a statement, a spokesperson for Woolworths said the company was rolling out electronic shelf labels and, after listening to customer feedback, had made changes to improve the readability of unit prices.

“Changes to pack sizes for branded products are decisions made by the supplier and are not common for Woolworths’ range of own brand products,” the spokesperson said.

Coles and Woolworths make up almost 70 per cent of supermarket retail sales nationwide.