The Shrinking Kiwi basket: How shrinkflation is quietly changing our consumer landscape

PHOTO: By Isla Melton

As open discussions about inflation continue to circulate throughout New Zealand, concerns can often extend beyond rising prices.

The gradual decrease in the size and quality of products while maintaining or increasing their prices has been labeled as both ‘shrinkflation’ and ‘skimpflation.’

Shrinkflation refers specifically to the reduction in product size or quantity without a corresponding drop in price, while skimpflation describes a decline in the quality of goods or services as companies cut costs.

Consumer NZ communications and campaign advisor Abby Damen said people are feeling frustrated and cheated when it comes to groceries in New Zealand, and it’s clear to see why.

Damen said “trust and choice has been eroded” by brands that choose to shrink and skimp on the quality of their products, while prices remain the same or increase.

Ekant Veer, a marketing Professor at the University of Canterbury, said both shrinkflation and skimpflation work on a psychological level for consumers.

Veer noted that when you see less money in your wallet, behavioral changes like choosing a smaller chocolate bar, or one with less chocolate content is “obvious.”

The pain of getting less bang for our buck isn’t as obvious as paying more for the same sized product."

Despite being heavily criticized, shrinkflation and skimpflation are legal tactics businesses can take.

Damen says that Consumer NZ members and the public will often complain about the methods but “there’s not much we can say or do.”

“What we can do is help educate New Zealanders so they can make informed purchasing decisions.”

In a 2023 Global Inflation Monitor survey of 33 countries, 46% of consumers said they noticed shrinkflation.

New Zealand's results were higher with 55% noticing the tactic, and the same number saying the practice was unacceptable as a way of responding to rising costs.

Veer said consumers need to be mindful about their purchasing habits as brands win when consumers are on autopilot and grabbing items at random.

Professor at the University of Canterbury, Ekant Veer. PHOTO: Supplied by Ekant Veer

A Consumer NZ report by Belinda Castles suggests the easiest way to compare the price of products regardless of the packaging size is to check unit prices.

Unit prices are often found below the market price of products. Unit prices show the cost per unit measure. Meat must be prices per kilogram, drinks per litre, and toilet paper per 100 sheets.

Major supermarkets in New Zealand, New World, Woolworths and PAK’nSAVE, all currently show unit prices, both online and in-store.

Supermarkets have been required under the Fair Trading Act to show unit prices since 2024, but these are becoming mandatory for online and advertised sale prices from the 31st of August.

The regulations made by the Commerce Commission New Zealand apply to any grocery retailers with internal floor space over 1,000sqm, and online retailers selling all ten product categories: bread, dairy products, egg or egg products, fruit, vegetables, meat, fish, rice, sugar and manufacturer-packaged food.

The regulations require the unit price for goods to be displayed clearly and legibly, and for the label to be no less than 25% the size of the marked price.

Castles shows in the 2023 report that a 500g block of Mainland Tasty cheese is $13.49, $26.98 per kg, while a 1kg block costs $18.49.

With these displays becoming mandatory, hopefully consumers will be less likely to fall for shrinkflation and skimpflation tactics.