January 23, 2019

Shrinking Value

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It’s official: pack sizes are shrinking! According to the Bank of England, food retailers in the UK are making pack sizes smaller and using cheaper ingredients in an effort to offset increased costs in the wake of Brexit. Since the referendum in June 2016, the value of sterling has depreciated by around 12% and now the effects are starting to be felt through the supply chain as food manufacturers deal with the new reality of higher costs of imported raw materials.

While a number of food retailers remain cautious about raising their prices (UK consumers are very price sensitive), others have resorted to ‘re-engineering’ their products by shrinking the pack size in an effort to keep prices low or maintain profit margins. Such attempts to capture value come at the expense of customers, but will they notice? According to consumer watchdog ‘Which?’, shrinking products without a reduction in price and failing to notify shoppers is ‘sneaky’.