Concept. October 1, 2021. What is Shrinkflation?

in LeoFinance2 months ago

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Shrinkinflation is a term that combines 2 words. The word "shrink" and the word "inflation". Shrink refers to a reduction in size. Inflation refers to the expansion of monetary supply resulting in increase in prices. Shrinkflation refers to the practice of reducing the size of products in an inflationary setting.

Businesses, in an attempt to maintain their profit margins in the setting of rising prices of raw materials and labor, will attempt to transmit some of the excess cost to the consumer. They will achieve that by reducing the size of a product, instead of rising its price. Psychologically, a consumer will be more negatively impacted by the rise in price than by a reduction in the size of a product.

This practice may be effective for some time, so as the consumer is not concerned about the size reduction of the product. However, experience tells that once the consumer becomes aware of the size reduction, the reaction is not good. Now that we enter an inflationary period, we will be able to see examples of shrinkflation.

This post is intended to only raise awareness. In order to make actual financial decisions please contact your financial advisor and/or tax advisor prior to making the decision.

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The subtle changes businesses make in product size is both sneaky and underhanded. The tricks in product sizing makes it difficult for shoppers to maximize their budget.

As for crypto, I just decided to try to apply the concept of shrinkflation to my upvote. So, I shrunk my upvote from 100% to 75% to see if the shrunk upvote is as effective, or if it just gets the account I curated ticked-off.


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Anything that contains the word "shrink" sounds funny :)