It is not possible for companies to hide inflation without charging more, as inflation refers to the overall increase in the prices of goods and services over time. However, companies can take measures to minimize the appearance of price increases, such as reducing the size or quantity of products while keeping the price the same or introducing products with lower-quality ingredients or materials. This is all psychology game to survive the inflation.
Some common ways that companies may try to mask price increases include:
1. Shrinkflation.
Do consumers notice when their everyday products get smaller due to inflation? Often they don’t and companies are taking advantage by reducing the size or quantity of a product while keeping the price the same.
Downsizing a product while keeping its price same instead of increasing price is called shrinkflation. It is made of two words, “shrink” and “inflation”.
For example, a bag of chips may contain fewer chips than before, but the price remains the same. I call it the economics of stealing from customers.
By downsizing a product, companies sell more units, results in increase in sales. This action balances out or sometimes increases the revenue.
2. Substitution.
Companies may switch to cheaper ingredients or raw materials to reduce costs, without changing the price of the product. For example, a food company may use cheaper, lower-quality ingredients in their products.
This sometimes affects the quality of the product, this is how companies manage the cost without increasing the overall price of it.
3. Discounts and FOMO marketing.
Companies may offer discounts or FOMO (fear of missing out) marketing ads to give the appearance of lower prices, even if the regular prices have increased.
Promotion Codes, Black Friday sales, etc. are some successful FOMO ads.
4. Changing packaging.
Companies may change the packaging of their products, making it look like the same amount of product is being offered, even if the size or quantity has been reduced. This strategy too came out successful multiple times.
In some scenarios I’ve seen glass bottle is changed in the plastic bottles then again into thin packet with small cap on it. I’ve even seen where a company keeps the size same for some days with 15% extra written on it where there is no increase in content, then in a few days they reduce 15% of its extra.
Conclusion.
Overall, while companies may try to hide inflation through these tactics, it is important to remain aware of price changes and compare prices across products and brands to make informed purchasing decisions. Companies do play such tricks to sustain in market so they can beat inflation by selling more without knowing customers that the quantity is reducing by a small margin. Since no one complains in this strategy, companies follow this more.
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