For years, consumer attention has been focused on shrinkflation, the phenomenon that leads to smaller packages sold at the same price. But today there is another practice, even more difficult to identify, which is attracting the attention of consumer associations and economic experts: skimpflation.
The term derives from the English verb to skimpwhich means “to skimp”, “to save money at the expense of quality”. In practice, instead of reducing the weight or number of pieces contained in a package, some companies choose to reduce the quality of the raw materials, change the recipes or cut some services, keeping the price almost unchanged.
For the consumer, the result is the same: you spend the same, but you receive less value.
What is skimpflation?
Skimpflation is a strategy adopted by some companies to contain the increase in production costs without affecting the final price too much. If raw materials, energy, transportation or labor costs increase, a company may decide to absorb some of the expenses. But when this is not enough, instead of increasing the price, it can intervene on the quality of the product.
This is precisely the aspect that distinguishes skimpflation from shrinkflation. With shrinkflation the quantity decreases: a pack goes, for example, from 500 to 450 grams.
With skimpflation, however, the packaging can remain identical, as can the weight of the product, but the ingredients, processes or level of service offered change.
Why companies resort to this strategy
In recent years the increase in production costs has affected practically all sectors. Energy, raw materials, logistics and wages have affected company balance sheets.
In a very competitive market, however, increasing prices can lead to the risk of losing customers. Many companies are therefore looking for alternative strategies to preserve profit margins.
Among the most common solutions are:
From a company point of view, this choice may appear less impactful than a clear increase in prices. From the consumer’s point of view, however, the change risks going unnoticed at least until the product is used.
How it manifests itself in the supermarket
In the food sector, skimpflation can take very different forms. One of the most frequent signs is the appearance of the wording “new recipe”. Naturally, not all reformulations represent a worsening: in some cases they serve to improve the product or make it more sustainable. In others, however, the change coincides with the use of less expensive ingredients to contain production costs.
Thus butter can be replaced, in whole or in part, with vegetable fats, more valuable raw materials can leave room for less expensive alternatives and the recipe can be enriched with thickeners, flavorings or other substitute ingredients. Furthermore, in some preparations, fresh eggs can be replaced by egg products, such as liquid or powdered eggs. Package weight and price may remain the same, but the perceived quality and value of the product may change significantly.
The weight of the product remains unchanged and often the price also changes little, but the overall value of the food may be lower.
Skimpflation isn’t just about food
This phenomenon does not only affect supermarket shelves. Even in services it is possible to observe forms of skimpflation.
In the hotel industry, for example, some hotels have reduced the frequency of cleaning or linen changes without lowering rates.
In restaurants it can translate into fewer staff in the dining room, longer waiting times or portions prepared with different ingredients than in the past.
In air transport, however, services that were once included in the ticket price – such as hand luggage, seat selection or on-board snacks – are now often only offered for a fee.
Chains like Ikea, for example, have also modified their iconic products and you just need to compare two from the same series but from different years to realize the reduced quality.
In all these cases the consumer continues to purchase a similar service, but receives less than a few years ago.
Skimpflation and shrinkflation: what are the differences
The two phenomena are often confused, but follow different logics.
Shrinkflation focuses on reducing quantity. The package contains less product, even if the price remains the same or increases slightly.
Skimpflation, on the other hand, affects quality. The product may have the same weight and the same external appearance, but be made with different ingredients or materials, or offer a reduced service.
There is also the possibility that the two strategies are adopted at the same time: smaller packages and lower quality in fact represent a double saving for the manufacturer.
How to recognize skimpflation
Identifying skimpflation is more difficult than shrinkflation, because it is not enough to simply observe the weight indicated on the package.
To notice this, it is useful to pay attention to some elements:
In the case of services, however, it may be useful to check what is actually included in the price compared to the past.
Is it a legal practice?
In itself, skimpflation is not prohibited, companies can change ingredients, recipes or characteristics of their products as long as they comply with current legislation and provide correct information to consumers.
The problem arises when the change is perceived as not very transparent or when marketing leads the consumer to believe that the product has remained identical despite having undergone significant changes.
For this reason, consumer associations have long been asking for greater clarity in communications and simpler information on changes made to products.
A phenomenon that also concerns sustainability
Skimpflation does not only have economic consequences, when higher quality ingredients are replaced with less valuable raw materials, or when a product lasts less and must be replaced more frequently, the risk of less sustainable consumption increases.
Consumer confidence may also be affected. Those who discover that a usual product has changed without being aware of it tend to change their purchasing choices, rewarding brands that communicate with greater transparency.
How to defend yourself from skimpflation (and shrinkflation)
Recognizing these phenomena requires even more attention today. In fact, with the entry into force of the new rules on shrinkflation, any reduction in the quantity of a product may no longer be indicated directly on the packaging, but through signs at the point of sale, labels on the shelves or product sheets in online stores.
For this reason it is useful not to stop at the packaging, but to check the price per kilo or per litre, periodically compare the list of ingredients of the products usually purchased and check whether words such as “new recipe” correspond to changes in the composition. Reading the order of the ingredients on the label, which by law are listed based on the quantity present, can also help to understand if a product has been reformulated. In the case of services, however, it is advisable to carefully check what is actually included in the price compared to the past.
In a context characterized by inflation and continuous price increases, being an informed consumer means looking not only at the final price, but also at the quantity and quality of what you buy.
