Shrinkflation

[Negotiation]

While inflation is a normal feature of the economy, hyperinflation is seen as a shock to the economy due to inflation, the prices of these products have gone up a lot which is hurting the economy. Savings will help the economy recover uncertainty increasing people's savings reduces consumption. But reducing costs will not increase demand and if there is no demand, entrepreneurs will not be interested in investment. Even if there is a crisis, they will be able to meet their product demand from savings.

[GeorgeJohn]

Actually it's quite understood that during occurrence of inflation it affects commodities and raw materials for manufacturing industries, so during inflation things began to accelerate and double it price, but a good manufacturer most keep up to standard and give official announcement of increment of product because of the conditions they purchased a raw materials for production, and it happens when a country is harmonised in aspect of governance, because producing a substandard materials because of inflation and it caused harm to humans after used, I think it will bring or introduce downfall to that particular industry, quantity production because of inflation is not ideal for someone who want it's industry to have a reputation and recommendations.

[YUriy1991]

Very interesting. If I'm not mistaken Shrinkage is a fraudulent practice that can undermine consumer trust in a brand. While it can help a company maintain profit margins in the short term, it can ultimately lead to long-term losses as customers may seek alternatives.

To combat inflation, companies can explore various strategies such as increasing efficiency in the production process, negotiating better prices from suppliers, or finding alternative sources of raw materials. They may also consider offering products at different prices or offering discounts for bulk purchases. I think the solution for the win win solution is transparency is the key. Communicating openly with customers about price increases can help maintain trust and loyalty.

[cydrix]

Does it ever matter? Inflation is inflation. It doesn't matter if the quality/quantity gets reduced or the prices go up.
You are terribly wrong about something.
The business owners/managers cannot "combat inflation". Only the governments and the central banks can fight inflation by interest rate hikes, higher taxes and cutting government expenses. 99% of the time, inflation is created by the governments and the central banks, which is a part of the absurd reality we live in. All the companies in the private sector can only adapt to the situation(by cutting costs and increasing the prices).

The problem is that businesses are using the current inflationary environment by raising their prices and/or decreasing their production in an effort to further boost their profits under the guise of global inflation. Businesses and corporations might not be able to stop inflation, but they can certainly make a bad situation even worse. In this country, supermarket chains are hitting records for earnings during a time that is typically characterized as unsettling and underwhelming. It's a confusing situation; on the one side, governments allow prices to rise continuously because there is little to no oversight, and on the other, businesses contribute to inflation since they are greedy to raise their enormous profits.

[Wind_FURY]

Very interesting. If I'm not mistaken Shrinkage is a fraudulent practice that can undermine consumer trust in a brand. While it can help a company maintain profit margins in the short term, it can ultimately lead to long-term losses as customers may seek alternatives.

To combat inflation, companies can explore various strategies such as increasing efficiency in the production process, negotiating better prices from suppliers, or finding alternative sources of raw materials. They may also consider offering products at different prices or offering discounts for bulk purchases. I think the solution for the win win solution is transparency is the key. Communicating openly with customers about price increases can help maintain trust and loyalty.

It's not that simple with the current situation. The inflation we're currently experiencing is "sticky". Plus to "combat inflation" is the Cental Bank's job because it's in their mandate to maintain price stability. What you're saying is to combat the effects of inflation, which really is a symptom that inflation is getting more uncontrollable. But in my opinion, with still too much money in the system, demand will remain to push prices up.

[puloweh555]

if i own a company and want to fight inflation so my company doesn't go bankrupt i will divert the company money to inflation resistant assets like gold and bitcoin because one effective way to fight inflation is to buy inflation resistant assets if things start to recover i will sell some of the assets that I bought so that my company can run again as before, this is just my personal opinion

Diverting company funds to buy bitcoins can be an effective strategy to fight inflation in the long term, as bitcoins are considered relatively stable assets against inflation and movements in the value of other currencies. You should consider your company's risk profile and liquidity needs before deciding to invest in bitcoins. Investing in bitcoins may not be suitable if your company requires high liquidity or has a low risk profile.

Moving funds back from bitcoin to the company once things are back to normal can be a good move to reallocate funds to more active business operations. However, you should consider the fluctuations in the bitcoin price at the time, and sell bitcoins at the right time to maximize profits.

[Fortify]

Shrinkflation is practice of reducing the size of a product while maintaining its sticker price.

I hate it when companies reduce quantity (and often quality too) of product to sell it at same price as before to combat inflation. Oh and don't forget those, "30% Extra" labels.

Inflation makes everything rise, so might as well keep the original quantity and just increase the price.

Do you agree? How would you combat inflation if you were running a company?

Not only that, these companies then have the audacity to still increase the underlying prices on these reduced quality and quality products a few months later. I can understand if there is an actual issue with ingredients going up in price and that will be an element of it, but you so often hear about increased profits in these companies too. There are definitely limits though and consumers are getting much more savvy to these type of hikes, when the quality drops especially it makes it easier to jump over to rival products which may even start to become superior. These big companies often walk a very fine line between covering increased costs and pushing away long term buyers of their products, thankfully it is much more visible now and backlashes can often cost them more money if they're caught.

[wiss19]

What about those companies that decrease the size and the quantity yet sell it at a higher price not only to fight inflation but also to stay profitable during these hard times without having any care for their consumers? Yes, that happens and we can always see that happening at lower scales and companies that are not too famous or average.

Personally, as you said, I wouldn't mind getting the exact same product that I like at a little bit of a higher price if the quality is the same, or, it is also not bad if the quantity is decreased but the quality is intact and the price is the same.

[Lucius]

If you can reduce the packaging and sell it at a higher price than before, and in addition use lower quality raw materials to make the product, then most companies will do it - profit comes first, and they consider customers to be sheep who are not very intelligent anyway.

That is truly a disgraceful act especially since the goods being sold are commodities or the main needs of the people in living their lives, that is too cruel, capitalistic thinking like that is inhumane.

Business is business, and everything else is irrelevant, considering that we have already become a society that is almost completely dependent on producers and sellers, and self-sustainability is becoming a fairy tale that even children no longer believe in. When the system makes you an "addict", then it is very easy to manipulate you, even if you realize that you are being manipulated.

A good article for those who want to see how it looks on concrete examples -> Here's what that looks like.

[Iadegbola34]

If I were running a company and faced with the challenge of inflation, my first priority would be to maintain the quality and quantity of my products or services. I believe it is important to maintain customer satisfaction and brand reputation, and reducing the quality or quantity of products is not a sustainable solution.

However, simply maintaining quality and quantity may not be enough to combat inflation. One strategy I would consider is to innovate by developing new products or services that are less affected by inflation or that can command higher prices. This may involve investing in research and development or exploring new markets.

[wxa7115]

If I were running a company and faced with the challenge of inflation, my first priority would be to maintain the quality and quantity of my products or services. I believe it is important to maintain customer satisfaction and brand reputation, and reducing the quality or quantity of products is not a sustainable solution.

However, simply maintaining quality and quantity may not be enough to combat inflation. One strategy I would consider is to innovate by developing new products or services that are less affected by inflation or that can command higher prices. This may involve investing in research and development or exploring new markets.

This sounds nice in theory but in practice those managing a company respond to the stock holders of such company, and those people care about the profits their business can produce, and if they concentrated on the quality of the products they offer regardless of the profits they can produce they will soon find themselves without a job.

So measures like offering less product for the same price are measures which are implemented relatively quickly and which are not temporal at all, and I know this is true as I take the time to look at the price of everything when I buy my groceries, and over the years many goods have reduced the product they offer and increased the price at which they offer it.

[Russlenat]

Shrinkflation is practice of reducing the size of a product while maintaining its sticker price.

I hate it when companies reduce quantity (and often quality too) of product to sell it at same price as before to combat inflation. Oh and don't forget those, "30% Extra" labels.

Inflation makes everything rise, so might as well keep the original quantity and just increase the price.

Do you agree? How would you combat inflation if you were running a company?

That's a marketing strategy to remain in business. Because not everyone understands inflation, a company cannot simply increase the prices of its products as it may disappoint customers. So, you don't have to hate it, just accept the reality that we are all affected by inflation and businesses are trying to keep their companies surviving during these tough times.

[siniminomorocomunisakito]

Shrinkflation is practice of reducing the size of a product while maintaining its sticker price.

I hate it when companies reduce quantity (and often quality too) of product to sell it at same price as before to combat inflation. Oh and don't forget those, "30% Extra" labels.

I think that's a misnomer is a bad and not good solution as you say "reduce the quantity (and often the quality) of product to sell it at the same price as before" and another option I think is to adjust its pricing strategy to reflect changes in inflation, rather than using the depreciation model. Yes, I think this is deemed necessary and a consideration for companies to contain and fight inflation in the framework of increasing production and distribution efficiency to reduce costs without sacrificing quality or quantity.

[axxo]

For me to combat inflation if I were running a company i will do some measures to be able to cope up with the inflation. I would increase prices that is acceptable to the customers. Reducing expenses by cost cutting or finding more efficient ways to operate. Try to negotiate to the suppliers to ask for price support or reduce the prices of the goods that they are supplying to the company. Diversifying revenue can help as well by expanding or offering new products or services. So it would depends on the company what is the best solution to cope up against inflation.