Coles, Woolworths shoppers call out 'shrinking' products: 'Shrinkflation is real'

If you think you've seen supermarket products getting smaller but not cheaper, this is why.

We've been hearing about it for years, but it seems Aussies across the country are still facing "shrinkflation" at Coles and Woolworths – and they're taking to social media to prove the phenomenon isn't just in their imagination.

"Woke up with massive hands...or Coles bakery bread is shrinking?" one man asked on Reddit this week, sharing a photo of a slice of wholemeal bread that fit in the palm of his left hand.

Other shoppers have shared side-by-side snaps of Ritz Crackers boxes that have shrunk from 300 grams to a mere 227 grams, noting that the regular price has remained $3.50 despite the change in size.

Coles shopper holding slice of wholemeal bread.
A Coles shopper has fuelled an exchange about 'shrinkflation' with this photo. Source: Reddit/Temporary-Storm-4411

'Is this what shrinkflation looks like?'

Shrinkflation – a term coined to describe shrinking package and portion sizes that cost the same or more than they originally did – is becoming an all-too-familiar phrase for many Aussies grappling with the rising cost of living.

"Is this what shrinkflation looks like?" someone asked in the Reddit thread about the slice of bread. "Shrinkflation is real," commented another, as other Redditors explained that the small loaf was more likely a result of under-proofing rather than shrinkflation.

A Coles spokesperson clarified in a statement to Yahoo News Australia that "the Coles in-store bakery bread has not reduced in size".

But while the bread may not have been an example of shrinkflation, other social media users cited examples such as the Ritz Crackers and packets of potato chips, which seem to contain fewer and fewer chips each year. "Hasn't everything been shrinking slowly for decades now yet getting more expensive?" asked one Reddit user. "It just makes you wonder how much shrinking the amount of product can go until basically you're paying for thin air!"

While the reduced-size Ritz Crackers boxes are $3.50 at Woolworths at the time of publication, shoppers can currently buy them on special for $2.50 at Coles.

Ritz crackers sold at Coles and Woolworths
Coles and Woolworths customers have noticed that boxes of Ritz Crackers have been reduced in size from 300 grams to 227 grams, while remaining the same price. Source: Facebook/E.Lyall

Why we're seeing more shrinkflation

In an interview with Yahoo News Australia, Professor Vinh Thai of the School of Accounting, Information Systems and Supply Chain at RMIT University explained that shrinkflation is something that we have witnessed many times in the past whenever there is some form of event that leads to increased costs for manufacturers.

Covid-19 and the events of the past two years including supply chain disruptions, fuel price hikes and labour shortages in Australia has caused costs to rise. While the backlog in the supply chain has stabilised and gradually decreased, the cost impact is still there.

"When costs increase like that, companies need to think of ways to minimise the impact," Professor Thai said. "So if the costs increase and if they [manufacturers] want to maintain the same profit margin, then the selling price will need to go up especially for commodities like food and groceries."

"If they want to minimise the negative impact, which is to keep the price the same, then the volume and the quantity of the product will need to be reduced," he added.

Calculated risk for brands

The downside for brands, however, lies when the customer, who would now be paying more for less of a particular product, decides that the product is no longer good value for money. "Statistically customers look for other options when faced with shrinkflation. They may or may not come back to that particular brand," Professor Thai said.

Some customers, however, will stick to a particular brand because of its affordability, Professor Thai further explained. "For that particular segment of customers, they are more willing to accept reduced quantity of the product they buy if it still has the same price."

Shrinking products unlikely to bounce back

Once a product has "shrunk" though, it is most likely going to stay that way, he added. "It's not like a boomerang, sadly."

Professor Thai also said that while some manufacturers would probably try to use any excuse to increase their profit, many tend to be concerned about providing customers with commodities that are of more value for money in order to foster brand loyalty.

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