[News Terms] Unable to Raise Prices, Reducing Quantity Instead: 'Shrinkflation'

"Huh? Why is there only this much snack inside?"

Sometimes, when casually buying snacks, drinks, or ice cream, you might feel that the quantity is smaller than before. It's not just a feeling. Upon comparison, there are quite a few products where the actual amount has decreased. The price remains the same, but companies reduce the content volume or switch to cheaper ingredients to maintain profits?this strategy is called 'shrinkflation.'

Shrinkflation is a compound word combining 'shrink,' meaning to decrease, and 'inflation,' referring to rising prices. The term was proposed by British economist Pippa Malmgren and refers to a marketing technique where, in a high inflation environment, companies indirectly achieve the effect of a price increase by reducing product volume or lowering quality instead of raising prices. It is also called 'package downsizing.'

For companies, this is a last-resort measure amid rising costs such as international grain prices and transportation expenses, where they cannot go against consumer resistance or government policies aimed at curbing inflation. Recently, the leading company in the domestic gummy jelly market reduced the weight of some products from 100g to 80g?a 20% reduction?while keeping the price the same. They stated that due to rising raw material costs and increasing government pressure to lower prices, they had no choice but to reduce the volume. However, from the consumer's perspective, even if the price remains the same, the reduced weight or lowered quality effectively means a price increase.

Under current law, reducing product volume without notification is not problematic as long as the packaging label matches the actual content. Because of this, consumer groups and experts point out that shrinkflation is a corporate 'deception' to reduce consumer resistance to price increases and a kind of 'trick' that causes price hikes without consumers noticing. There are also calls for companies to notify consumers in advance about volume changes just as they do for price changes, and for the government to manage and supervise this.

Professor Eunhee Lee of the Department of Consumer Studies at Inha University said, "When companies change product weight, they can effectively achieve the same result as a price increase, but it is natural for consumers to feel deceived. Currently, there is no separate regulation or sanction against reducing product volume without notification, so consumers must carefully check and compare when purchasing."