Helping Your Shoppers Beat “Shrinkflation”
Are you paying attention to the frustration your shoppers are experiencing as food prices continue to challenge budgets? “Shrinkflation” is a buzzword making headlines this year, which may be impacting consumer loyalty to not only brands, but their retailers as well.
Shrinkflation is the phenomenon that occurs when the size or quantity of a product is reduced, while the price remains the same or is even increased. Essentially, it is a tactic used by manufacturers to maintain profit margins in the face of rising production costs without visibly increasing the price of the product. The term "shrinkflation" is a combination of "shrink" and "inflation," reflecting the reduction in size and the increase in prices respectively.
But shoppers and grocery retailers are challenging brands to verify their increased costs. Chairman of Tesco, John Allen said it is entirely possible that some food firms are profiteering from inflation at the cost of some of the poorest consumers. He also told the BBC that Tesco's had a falling out with a number of suppliers following discussions over price hikes that the supermarket has challenged. They've created a new team to monitor food, import input costs against price rises. They're challenging companies that it believes are lifting prices disproportionately. They are not alone. Walmart, Hy-Vee, Giant Eagle, and many more are retailers that are pushing back on price increases. The reason is simple: in the aisles and at the checkout, shoppers are pointing the blame for higher prices to the retailer instead of to the brands. The retailer has to fight back to protect their shoppers and their relationship with the shopper.
What can retail dietitians do to retain the loyalty of their shoppers and help them beat “shrinkflation” in the supermarket aisles?
1. Encourage shoppers to read the fine print. While flashy messaging like “giant size” and “family size” appear on packages, and even sometimes the packaging has increased in size, but the product inside has not, this can be misleading. For example, 32 oz. Gatorade bottles are now 28 oz., many ice cream brands in pint size packages now only have 14 oz. inside, and raisins in some brands have decreased by 2 oz., which means about 70 fewer raisins. Savvy shoppers may be reading those labels, planning ahead with their lists or scanning QR codes for full info, but there are still many of your customers like seniors or visually impaired that find fine print challenging. And there are those shoppers that aren’t technologically inclined or don’t use or can’t afford smart phones.
2. Guide shoppers to other brands or store brands. Last June, the Food Industry Association (FMI) reported that 41% of shoppers bought more private label items in the 2022 spring months than they did before the pandemic started. And by now many shoppers have learned that private label brands have become very skilled in matching their counterparts in quality, taste and variety. Assuring your shoppers that alternative brands can offer the same benefits without shrinking content is one way to reduce their bill.
3. Promote those loyalty card benefits. Rewards cards have been around long enough that one might assume shoppers are taking advantage of these benefits, but in some cases, shoppers may not realize what benefits they can actual receive, how to tap into them, or they are simply weary of “signing up” for lists that flood their email inboxes. Take time to remind your shoppers what the highlights of your store’s rewards cards offer and how to take full advantage of those savings.
4. Teach your shoppers how to buy in bulk. Not all foods are good candidates for buying in bulk, but with a little planning ahead, many versatile items that have a long shelf life (like dried beans, whole grains, pasta and oats) or frozen fruits and vegetables that have a similar nutritional profile to fresh produce, can save a lot of money when purchased in bulk.
A more frugal grocery shopper is in the aisles today. Therein lies the opportunity for retail dietitians to offer guidance that will have a significant impact on their food bill, while still helping them maintain a healthy and balanced diet and keep them confidently coming back to shop at your store.