Is your business a victim of shrinkflation? Don’t pay more for shorter receipt rolls.
Would you pay the same price for a 15-ounce box of cereal as a 17-ounce box? What if the product and packaging were exactly the same? Many consumers do so every day without noticing the difference. This subtle form of deception is called shrinkflation, and it’s become a popular manufacturing strategy in recent years.
Businesses use shrinkflation to reduce costs while maintaining or even increasing profits. This article will explain the root causes of this legal, yet evasive practice, and discuss what it means for you as a business. We’ll tell you why the Paper Planet brand refuse to follow this sneaky trend, keeping our full-sized rolls full-sized.
What is shrinkflation?
In short, shrinkflation is the manufacturing practice of downsizing a product while keeping prices the same. The product may shrink in size or quantity. For example, a roll of 264 paper towels is shrunk to 244. Yet the price never changes.
Although not necessarily dishonest, shrinkflation is criticized as a sneaky strategy. While the price and packaging remain the same, the amount has changed to boost the manufacturer’s top line.
What causes shrinkflation?
Shrinkflation typically results from inflation. Businesses feel forced to raise their prices to combat increasing manufacturing costs. Other factors include:
- The cost of raw materials
- Processing costs going up unexpectedly
- Back-ups in the supply chain
- A reduction in the labor force
- Demand for higher wages
- Profit margins shrinking for no apparent reason
Why shrinkflation seems like a good business strategy on the surface
Another major contributor to shrinkflation is industry competition. Raising sticker prices in a competitive market can be risky. To maintain customer loyalty, some businesses believe it’s a better idea to pass on the production costs indirectly by discreetly downsizing products.
Studies find that consumers are deterred more by price increases than by package size reductions. Often, manufacturers avoid calling attention to the newly diminished products, and unsuspecting consumers continue to pay the same price for less.
It’s easy to rename or repackage a product to distract buyers from seeing what’s happening behind the scenes. You can blame the change on marketing, claiming you’re revamping your product packaging to make it more modern, eco-friendly, or “convenient” for the consumer.
How shrinkflation can negatively affect your business
With shrinkflation, manufacturers spend less on production while making the same profit and maintaining consumer sentiment. Sounds like a win-win. But consumers now pay more per unit or volume, and eventually, they’ll notice.
A 2024 survey addressing the high cost of food and groceries found that 83% of those polled would like companies to be more transparent about reducing product sizes. Specifically, they’d like to see products clearly labeled and unit pricing displayed so they can make a more informed purchasing decision.
Customer loyalty can suffer if a company employs shrinkflation too often or drastically. Consumers may decide they don’t need your product as much as they used to. Or, worse, they may turn to a competing brand that has not compromised their confidence.
Paper Planet says “no” to shrinkflation
Shrinkflation can affect any business, big or small, regardless of industry. While you, as a business, may not employ the tactic, you can be affected by it through the everyday products you purchase to run your business, like POS paper.
Many competing companies have jumped on board with the shrinkflation scheme. Their rolls have shrunk significantly without drawing attention to the fact. In fact, some competitor’s rolls are precisely half the length— for the same price. Meanwhile, Paper Planet brand rolls are always full-sized.
The benefits of full-sized POS paper rolls
Full-sized rolls offer more prints per roll than the downsized version. This means you’re purchasing POS paper less frequently and for a lower cost each month. It also means no more running out of receipt paper during a sale. Faster customer turnaround and less expenditure ultimately help improve your bottom line.
But saving money isn’t the only benefit. When you order paper from PaperPlanet.com you won’t have to waste time scrutinizing the specs. Instead of worrying about roll size in inches and feet, just look for the Paper Planet brand. Rest assured, you’re purchasing the correct size of paper from a business that is dedicated to fair, transparent prices and high-quality products.
