Facts for Prelims (FFP)
Source: Financial Express
Context: Shrinkflation, the reduction in product sizes while maintaining prices, is resurfacing in the fast-moving consumer goods (FMCG) industry due to rising input costs.
- Brands like Clear, Frooti, and Smoodh are introducing smaller packaging at the same or slightly reduced prices to cope with inflation.
- The trend is attributed to various factors, including rising prices of commodities like crude oil, palm oil, coffee, cocoa, and sugar, alongside global supply chain disruptions and geopolitical tensions.
Shrinkflation refers to the practice employed by manufacturers wherein the size or quantity of a product is reduced while keeping its price the same or slightly adjusted.
This strategy allows companies to maintain profit margins amid rising production costs.
Shrinkflation often goes unnoticed by consumers initially but can lead to dissatisfaction as they realize they are receiving less for the same amount of money.
