Reducing your business costs through Shrinkflation

How to reduce your business costs through Shrinkflation

Last week, there was outrage across social media as McVities announced that in order to keep their costs down and pass on savings to customers, they would be reducing the quantity of Jaffa Cakes from 12 per box to 10. Outrage! See for the full story.

What is more outrageous is that retailers aren’t actually under any obligation to reduce the sale price. The manufacturer, after all, can only set a recommended retail price. Any increased profits from the reduced wholesale cost and the stagnant sale price will be passed on to the retailer. I think it’s highly likely that retailers will oblige McVities in reducing the sale price of Jaffa Cakes, and consumers will at least see some of the savings.

What is Shrinkflation?

[Read more…]