The return of ‘Shrinkflation’ affecting Cadbury Dairy Milk bars is an unwelcome development
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Guest blog: The decision by Mondelēz to reduce Dairy Milk sharing bars by 10% in size has re-ignited the ‘shrinkflation debate’ on how manufacturers handle inflationary pressures. Cloe Legrand, consumer analyst at GlobalData, offers her view on this major industry topic.
“It was only a matter of time before fast-moving consumer goods (FMCG) producers looked at alternative ways to minimise costs given the recent challenges hitting the industry, with shrinkflation being a proven strategy in the past. However, Cadbury’s tactic of reducing pack sizes may not sit well with consumers.
“Currently, shoppers are more price-sensitive than they were pre-pandemic with GlobalData’s Q1 2022 global consumer survey revealing that 60%* of people are concerned about their financial situation. This concern still rings true as consumers are facing rising inflation and higher energy bills. even after restrictions are lifting It could mean that the combination of higher prices with smaller sizes will alienate more price-sensitive consumers.
“People want value for money, particularly regarding confectionery with 16% of UK consumers believing large portions sizes equate to good value and younger consumers are more concerned about portion sizes. According to GlobalData, in the UK, 21% of Gen X and 19% of Gen Y consumers believe large portion sizes are good value for money, compared to Boomers with 10% and the Silent Generation with 0%.
“Shrinkflation might help to mitigate the rising costs that companies are facing right now as well as helping to sustain jobs in the long term. In the short term, value conscious consumers will consider more affordable alternatives as price rises take their toll. As a result, brands should communicate these changes to consumers to be more transparent and explain if there is any improvement.”
