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6 May, 2022 12:23

British shoppers hit by ‘shrinkflation’

Rising commodity, energy, and labor costs have been forcing companies in the UK to downsize their products
British shoppers hit by ‘shrinkflation’

Food giants and other companies in Britain have been cutting the size of their products lately in response to rising costs to keep the price the same. Economists warn that inflationary pressure will remain for the rest of the year, meaning Britons will further feel the impact of ‘shrinkflation’ as companies pass the costs on to customers.

According to the Institute of Grocery Distribution, 80% of UK shoppers have noticed ‘shrinkflation’ - the practice of reducing the size of a product - happening in retail in the last 12 months. Sweet snacks, chilled products, as well as fresh meat and fish, have all been getting smaller in the last year, consumers said.

According to the Office for National Statistics (ONS), the average price paid for food and non-alcoholic beverages was up 5.9% over the last year, and the cost for restaurants and hotels surged 6.9%.

Experts point to rising costs, labor shortages and supply chain issues among the factors putting inflationary pressure on food supply chains. The hospitality industry has been also contending with post-pandemic recovery.

‘Shrinkflation’ has been taking place in the UK for the past decade, with data from the ONS revealing that 206 products shrank in size between September 2015 and June 2017. The trend is likely to continue this year amid a cost-of-living crisis in Britain.

The Bank of England earlier issued a dire warning, saying that Britons will suffer an “historic” shock to their incomes as it expects the record-high inflation to continue rising. On Thursday, the regulator said that the cost-of-living crisis could plunge the economy into recession this year.

For more stories on economy & finance visit RT's business section