Concept
Shrinkflation (Quantity Reduction Pricing)
pricing packaging perception
Reducing the quantity of a product while holding its price constant raises revenue with far less consumer backlash than raising the price by an equivalent amount would. Consumers are typically far more price-sensitive than they are quantity-sensitive, so a quiet reduction in weight or volume often goes unnoticed even as it delivers the same margin gain as a price increase would.
Peanut-butter brand Skippy added a small dimple to the bottom of its jar, quietly cutting the volume of peanut butter inside from 18 ounces to 16.3 ounces — about a 10% reduction — while keeping the price unchanged. The change produced a 10% overnight increase in revenue, and the tactic was widely copied elsewhere: shorter movie runtimes, reduced airline legroom, and thinner B2B service bundles are all cited as the same underlying pattern applied outside food packaging (see Skippy Peanut Butter Dimple Shrinkflation Case).
Why it goes unnoticed, and a real-world test (Episode 210). Grace Forell of Which? documents widespread shrinkflation across UK grocery categories, and a Which? survey finding 77% of shoppers had noticed some shrinkflation, though 75%/76% found it non-transparent/unhelpful (see Which Shrinkflation Survey and Product Examples) — yet sales don't meaningfully drop, because change blindness means most individual instances stay below the threshold shoppers can actually detect, especially without a side-by-side old-vs-new comparison. Phill Agnew tested this directly, shrinking a loaf of Britain's most popular bread brand by 5.5% and showing it to 12 Bolton residents — only 2 noticed (see Nudge Podcast Change-Blindness Self-Experiments). French retailer Carrefour's solution was shelf labels flagging specific shrunk products to shoppers directly (see Carrefour Shrinkflation Labeling Case).
Discussed in
- Episode 42 — 42- Common pricing mistakes most businesses make
- Episode 210 — 210-i-shrunk-britain-s-1-bread-did-anyone-notice