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Shrinkflation Meets Shelflation

Grocers are now dealing with a very frugal consumer, and issues such as “shrinkflation” and “shelflation” are becoming areas of concern for them.

by Sylvain Charlebois

Shrinkflation is a common topic in the media and among consumers these days. Without rising prices, quantities are lowered by either reducing portion sizes or by altering packaging strategies. The topic has always been taboo, but we’re starting to see companies admitting to doing it on occasion. It’s not unlawful to reduce quantities, since all the information is given to the consumer at the point of purchase.

Consumers should appreciate that supply chain economics can be challenging at times, and companies need to adjust while remaining competitive. The industry shouldn’t necessarily apologize for shrinkflation, but it also ought to acknowledge it. With social media, consumers have access to a powerful information resource.

Shelflation: What it is and why it matters

“Shelflation” is another supply chain phenomenon starting to attract more attention. This is when the quality and freshness of food products, mostly perishables, are compromised by supply chain issues. Since products take more time to reach stores, a product’s shelf life is shortened, hence “shelflation.”

Labour and technical issues, compounded by cold chain breaches and transportation delays, will get you more “shelflation” cases. But things appear to be worse since the start of the pandemic.

41% of consumers in the last 12 months admitted having thrown away milk before its expiry date because it had gone sour

Almost 32% said it had happened at least once

38% indicated it had happened at least twice

Source: recent survey by Caddle

Such occurrences aren’t new, but these percentages are unusually high. Anecdotally, we are hearing of more cases related to produce. And it’s not just in Canada; it’s in the industrialized world. Our lab is currently working on a project related to product quality and freshness.

More consumers are sharing their “shelflation” stories on social media. A growing number of consumers are aware of how supply chain woes can impact their own food budget now.

Helping consumers reduce food waste

As with “shrinkflation,” grocers are hardly to blame for “shelflation.” Getting food to store, and making sure products are not too ripe can be challenging at times, especially now. These things, though, are hard to explain to consumers, especially right now when food inflation is impacting everyone. With more reported empty shelves, many consumers have shown an interest in understanding how supply chains work, and that food doesn’t magically appear on store shelves, while food distribution remains an abstract concept for most.

In the grand scheme of things, “shelflation,” like “shrinkflation,” are first-world problems, but they do impact the image of the industry. With fewer savings in the stores these days, empowering consumers to save at home by reducing waste can go a long way. Flash discounts, and in-store daily deals, for example, will have a huge impact on the sector’s image.

Addressing the problem

There is some movement around eliminating expiry dates. Morrisons, one of the largest supermarkets in the U.K., announced in January the removal of use-by dates on milk bottles in a move to stop millions of pints from being wasted. Morrisons hopes this will stop consumers from throwing out milk that is safe to drink and entice them to rely on their own senses: visuals and smells. Less waste, more savings—something to think about for grocers in Canada.

Technologically, some solutions do exist. Dynamic pricing, which has been around for a while, can help. It does show how grocers care about waste and helping consumers save at home. But essentially, being aware that consumers are more careful these days with how they spend their money when grocery shopping is key, at least until we’re done with supply chain quandaries.

Sylvain Charlebois is a professor in food distribution and policy, and senior director of the Agri-Food Analytics Lab at Dalhousie University [email protected]

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