What is shrinkflation and why are consumers pushing back: A summary
- Shrinkflation means reducing product size without lowering the price
- Major brands like Nestlé and PepsiCo quietly downsize popular items
- Consumers now notice changes, especially in familiar seasonal packaging
- Private labels are gaining ground by offering better value alternatives
- Lack of transparency erodes trust and risks long-term brand loyalty
Shrinkflation hit the headlines in a big way last year when major manufacturers including PepsiCo, Mondelēz International and Nestlé downsized some of their best-loved products, without cutting the price.
And while this may have seemed like a necessary way for companies to cut costs, the long-term reputational damage could far outweigh any short-term financial gains.
What is shrinkflation?
Shrinkflation is the practice of reducing the size or quantity of a product, while keeping its price the same, effectively increasing the price per unit of measurement.
It's a subtle strategy used by companies, especially in the food and beverage industry, to maintain or boost profit margins, without making the price increase obvious to consumers.
Examples include fewer sweets in a bag, fewer biscuits in a packet, and fewer teabags in a box.
Beware shrinkflation
“Shrinkflation often arises from a brand’s assumption that consumers are more resistant to visible price increases than to subtle reductions in quantity - especially for lower-priced, high-frequency products,” says Chandramouli Nilakantan, CEO of brand analytics and consumer insights company TRA Research.
This assumption is wrong. Because while consumers may not clock the changes right away, awareness builds steadily over time, particularly in categories with habitual use and packaging familiarity.
The Christmas chocolate tins, such as Celebrations, Miniature Heroes, Roses and Quality Street are a prime example of this. The shrink has been happening for years and consumers, having gotten wise to it, are most certainly not happy.
“At this rate, the tub will quite literally be empty by 2035,” says Tom Church, co-founder of bargain-hunting site LatestDeals.co.uk, of the Quality Street tins, which have dropped from 600g to 550g this year alone. They were 780g just a decade ago.
But marketing wizards Marks & Spencer, who seem to have the Midas touch when it comes to Christmas treats, has offered shoppers a sizeable alternative - the British food and beverage retailer has launched a 1.2kg tub of chocolates in interestingly familiar colours and flavours, as an alternative to the perpetually-shrinking branded options. In other words, private label is again stepping up to fight for market share, and it’s doing it in what was once an extremely safe branded space. What’s more, they might just win.
“Shrinkflation tests the psychological foundation of loyalty,” says TRA Research’s Nilakantan.
Shrinkflation tests the psychological foundation of loyalty
Chandramouli Nilakantan, CEO, TRA Research
Loyalty, he explains, is not a transactional phenomenon. It involves a complex cognitive-emotional mix of oxytocin release, confirmation bias, cognitive dissonance, and the psychological commitment that forms a part of the consumer’s self-identity. Once trust is integrated into the consumer’s worldview, any violation - especially from a long-trusted brand - triggers a disproportionately strong emotional backlash. The risk of erosion is therefore not only real - it’s substantial and often underestimated.
“While brands may rationalise shrinkflation as a pragmatic response to rising costs, consumers generally view it as a breach of transparency - especially when it is not clearly communicated,” says Nilakantan.
And once that erosion of trust begins, it’s incredibly difficult to reverse. In other words, brands should prepare themselves for the fact they may lose customers altogether, and ask themselves if the short-term savings are really worth the risk.
“This is particularly true for legacy brands that have enjoyed long-standing trust,” says Nilakantan. “Consumers feel a sense of betrayal, not just of value, but of personal belief, signalling a betrayal that reverberates well beyond the shelf.”
And there’s already evidence to suggest loyal customers are jumping ship.
“Today, with a proliferation of new brands and categories actively seeking to disrupt traditional consumption, consumers have more incentives to experiment,” explains Nilakantan. “In fact, the power dynamic has flipped - brands no longer command loyalty, consumers expect brands to earn it continuously. Shrinkflation, if mishandled, accelerates this shift.”
Sectors most vulnerable to shrinkflation loss
Confectionery snacks and soft drinks are three of the categories most associated with shrinkflation. However, they’re also the ones most vulnerable to shopper abandonment.
“Products at low price points and those driven by impulse purchases are especially sensitive,” says TRA Research’s Nilakantan.
The problem lies in the fact that their low price makes them easy to switch and experiment with.
Communicating shrinkflation
Communicating shrinkflation is always going to be tricky as customers are never going to be happy about it.
But there’s one golden rule that must always be adhered to - transparency.
“Brands that have managed this transition well, focus on one central principle - transparent communication,” says TRA Research’s Nilakantan. “Instead of concealing changes, they acknowledge market realities, provide reasons for product adjustments, and, where possible, offer counterbalancing value - such as product innovation or health benefits.”
The shrinkflation gamble
In an era where consumer trust is both fragile and fiercely defended, shrinkflation is more than a pricing tactic, it’s a huge reputational risk.
Brands must recognise that loyalty is no longer guaranteed, and transparency is no longer optional. As private labels gain ground and shoppers grow more discerning, the challenge for manufacturers is clear - communicate openly, innovate meaningfully, and earn trust continuously. Because once lost, loyalty is a currency that’s hard to reclaim.
