All Articles Food Consumer Insights Shrinkflation: What consumers really think about the inflation-driven trend

Shrinkflation: What consumers really think about the inflation-driven trend

"Shrinkflation" is becoming more prevalent as industries adjust to economic challenges, with Gen X and millennials feeling the impact most acutely.

4 min read

Consumer InsightsFood

Young Asian woman carrying a shopping basket while grocery shopping in supermarket, standing along the dairy aisle, reading the nutrition label on a packet of fresh organic cheese.

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Inflation has been an increasingly prevalent hardship for consumers in recent years, as prices have gone up and consumers struggle with ways to pay for everything from housing to food with diminishing resources. 

But despite being increasingly price-sensitive, consumers have also grown frustrated by the way many industries have chosen to adjust to consumers’ behavior in challenging economic times.  Shrinkflation, where the size of a product gets smaller without a corresponding price increase, is causing widespread concern among consumers, according to Datassential’s new “Shrinkflation” report. 

Coupled with skimpflation, where quality declines without a price drop, these hidden forms of inflation are becoming more prevalent.

Here’s a look at how consumers of all ages feel about these changes that have become increasingly commonplace, and where they’re noticing it the most: 

What Consumers are Most Concerned?

A majority of consumers have at least some worries about shrinkflation, but Gen Xers (born between 1965 and 1981) are feeling it most acutely, although the slightly younger Millennials are not far behind. 

One-third of Millennials (34%) and Gen X (35%) say they’re extremely concerned, while Boomers (31%) and Gen Z (26%) also express unease. 

Where is Shrinkflation Noticed Most?

These concerns are most apparent in everyday essentials, especially food and beverages, but also including personal care items. Nearly two-thirds of consumers report having noticed rising restaurant prices over the past year. 

Boomers and Gen X are more likely than younger generations to say that prices of food and beverages have risen across both retail and foodservice venues.

But consumers are not just noticing smaller portions; they are frustrated by rising prices in restaurants and grocery stores. Nearly three-in-four (73%) consumers reported inflation in grocery prices, and 71% say they’ve noticed it in personal care items like shampoo and toothpaste. Comparatively, 63% of consumers say they’ve felt the increase in restaurant prices. 

Restaurants vs. Retail Shrinkflation

More than two in five Gen X consumers say they have witnessed or experienced a decline in pack or portion sizes when purchasing retail F&B within the past year. Gen Z and Millennials, meanwhile, are slightly more likely than older generations to have noticed a significant decline in retail food and beverage quality. 

Nearly half of Gen X consumers reported seeing smaller package sizes, and Millennials and Gen Z also noticed declines in food quality. Snack foods, cereals, frozen meals, and dry goods are the most affected, with over 30% of respondents reporting reduced package sizes in these categories.

In restaurants, Gen Z – the youngest generation in adulthood –  is the likeliest generation to have noticed a general reduction in both portion size and food quality.

In restaurants, younger generations (especially Gen Z) are more likely to notice a reduction in portion sizes or quality. And it’s impacting dining habits: Almost half (41%) of restaurant-goers reported that they would consider switching to a different restaurant if their favorite menu items shrank in size or quality.

Consumer Response

In response to inflation, shrinkflation, or skimpflation, most consumers are likely to adjust their purchases to preserve their budgets—and this is happening across all retail categories.

Retail food and beverages are slightly more vulnerable to consumers’ penny-pinching, though, compared with categories like pet supplies, baby products, or personal health items. That’s likely due to the fact that brand loyalties are stronger within these essential categories, or because suitable alternatives may be harder to find. 

Within retail food and beverage, consumers have turned to bulk buying, particularly for non-perishable items like dry goods and frozen foods, as a way to mitigate the impact. And many consumers are willing to trade down and opt for a cheaper brand (38% of shoppers say they are likely to switch brands when faced with shrinkflation in food items). 

Fresh food, like produce and dairy, holds more consumer loyalty, but fewer are willing to switch brands or don’t have available alternatives. 

Looking Ahead

As inflation and shrinkflation continue to stretch household budgets, brand loyalty weakens. Consumers are becoming savvier about pricing strategies and are willing to switch to alternatives, particularly when it comes to non-essential products like snack foods and beverages.

For food producers and retailers, maintaining consumer trust will be crucial. Transparent communication about price and portion size changes may help brands retain their customer base. Offering promotions or loyalty programs could also counteract the frustration caused by shrinkflation.

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