[News Terms] Prices Stay the Same, Quantity Increases... Spread of 'Reverse Shrinkflation'

'Reverse Shrinkflation' Boosts Customer Satisfaction
The Opposite of 'Shrinkflation,' Which Reduces Product Volume

A citizen is examining a receipt at a large supermarket in Seoul. Photo by Kim Hyun-min

The distribution industry is experiencing a trend of 'reverse shrinkflation.' This refers to strategies that increase product volume while maintaining the existing price or lower the price to enhance cost-effectiveness. It is the opposite concept of 'shrinkflation' and targets consumers who prioritize value for money.

The convenience store sector is the most proactive in adopting reverse shrinkflation strategies. GS25 recently announced that it will sell two types of 'Real Meka Tongtong Sausage,' increasing the weight from 180g to 250g while keeping the price unchanged. Additionally, since the 4th of this month, it has been selling 'Seonyang Oak' from the local soju maker Seonyang Soju in Daejeon and Chungcheong regions in a large 640mL size, larger than regular soju. Regular soju sold at convenience stores is priced at about 6 won per 1mL, while the large-sized Seonyang soju product is priced lower at approximately 4.7 won per mL.

Emart24 also launched '1000 Black Coffee' on the 13th. It offers a larger volume (500mL) than existing pouch drinks and a lower price, allowing customers to purchase it for an affordable 2,300 won even including an ice cup. CU lowered the prices of five coffee menu items under its PB brand 'Delape' by 100 to 200 won at the end of last month, joining the cost-effectiveness competition.

Large supermarkets are also actively working to ease the burden of rising prices. In particular, some supermarkets are holding 'price reversal' events on specific products, offering them at prices lower than before. Earlier, the three major supermarkets (Emart, Lotte Mart, Homeplus) competed with ultra-low-priced imported pork belly for Pork Belly Day (March 3). When Lotte Mart offered pork belly at around 800 won per 100g, Emart and Homeplus responded with products priced in the 700 won range. This appears to be a strategy to attract consumers burdened by rising prices while increasing customer loyalty.

A customer is purchasing agricultural and marine products at a large supermarket in Seoul. Photo by Jo Yong-jun

Until just a few years ago, companies used the shrinkflation strategy, reducing product volume instead of raising prices due to rising costs. Shrinkflation is a compound word combining 'shrink,' meaning 'to decrease,' and 'inflation,' meaning 'price increase.' Companies chose this strategy fearing strong consumer backlash if they raised product prices. However, consumers criticized it as a 'sly price increase,' which instead generated negative public opinion.

As consumer dissatisfaction grew, the government also took action. According to the 'Notification on Unfair Consumer Transaction Acts by Businesses' implemented in August last year, businesses that fail to disclose volume changes face fines of 5 million won for the first violation and 10 million won for the second. Recently, the Consumer Sovereignty Citizens' Association pointed out, "In difficult economic circumstances, consumers are suffering from companies' sly tactics," and urged, "Companies must immediately stop shifting the burden of abnormal weather and production costs onto consumers through shrinkflation and price increases."