What is shrinkflation?
Shrinkflation is the practice of shrinking the size of consumer products while maintaining the price.
A number of companies have been upping the price per given amount in recent years as a way to save money and boost their profits.
However, due to the variety of reasons given for shrinkflation practices, some of the changes occur quietly and without too much attention paid. And yet, the size of some products - or at least the quantity of product within the very same packaging - has so dramatically changed that consumers are increasingly aware of this issue.
Typical shrinking products include potato chips, chocolate bars, toilet paper, washing detergent, household cleaners, cereals and breads. Although paying more for less is widespread across many more products, including fruit and vegetables.
Why are companies shrinking products?
The simple answer is so they can save money and boost profits.
The more complicated answer is because shops claim other stops in the supply chain have increased their pricing, be it at the supplier, with packaging, transportation or even on the farm. The end result is a smaller take home product sold at the same price as before.
Of course, prices often increase across the supply chain when inflation is high, as it has been for the past couple of years. However, shrinkflation has been widely reported as occurring prior to this current high inflationary period as far back as 2016. In this way, it’s been used as a sort of hidden inflation.
How is shrinkflation measured?
Shrinkflation is captured in official inflation data by the Australian Bureau of Statistics.
In particular, the ABS observes where the quantity (or volume) of a product falls but the price remains the same. It then calculates the adjusted price as a percentage and includes this in its official Consumer Price Index.
However, some costs to consumers will usually be missed in statistics because some businesses use cheaper materials to save money. This is obviously much harder for the government to measure.
Will shrunken products go back to normal?
It’s not likely. Once the change is made, most companies want to establish a ‘new normal’. Some are even said to take advantage of the smaller product version by using it as a way to market a new ‘bonus size’ iteration that’s a bit bigger and presumably more expensive.
Is shrinkflation legal?
Unfortunately there are no laws preventing companies from using shrinkflation tactics.
Though many money experts suggest retailers should be required to let consumers know when a product has changed in size and value so that they can make more informed buying decisions.
What can I do to combat shrinkflation?
Beating shrinkflation starts with awareness. When you’re next in the shopping aisles, try some simple comparisons. Check the contents and price before you throw something in the trolley.
Ask yourself:
- Does the product in question look different than before?
- Is it smaller or lighter in weight?
- Does it look or feel like there are fewer 'units' inside?
- Does the box or packet have a different label?
- Is another brand noticeably cheaper?
Once you've drawn some initial conclusions, you might be in a better position to either select a different more-value-for-money product, or even decide to shop elsewhere.
Local market stalls, farmer’s markets and even small suburban grocers might also offer more value for money on some items. It’s worth shopping around.
3 everyday ways to beat shrinkflation
If you’re looking for other practical ways to beat the potential sting of shrinkflation, it can help to be frugal across the board.
So here are three simple cost-saving ideas that can help:
- Cut back on discretionary spending: Spending less money is also about knowing what not to buy. We all have non-essentials we could skip for a while. These can include streaming subscriptions, take-away food, expensive fashion items or even too much travel.
- Cook at home: Eating out can be costly. Organising your meals and budgeting for your own ingredients can go a long way toward reducing your weekly spend. In many cases it can also be healthier!
- Consolidate your debt: Paying interest across credit cards, buy now pay later services, personal loans or even car loans can add up. But you can actually roll your debts together into a debt consolidation loan, which can really save you on total interest expenses.
Save money in all areas of your (financial) life
Shrinkflation is just one aspect of our economic world that can trip us up. The reality is that to save money we should always stay on top of all our personal finances.
For example, when you compare personal finance products, you’ll notice there are significant differences between them and therefore a number of ways to save on each.
At Mozo, we suggest to save more and improve your budget further you can:
- Compare savings accounts for the best level of interest.
- Compare home loans for both their fees and interest rates.
- Compare credit cards and the interest charged.
- Compare insurance policies and where you might save.
And finally, review your budget and see where you can cut back.
If you need some help selecting the right financial product for your needs, be sure to check out our Mozo Expert Choice Awards, which includes the top choices from our in-house experts.
And below our team has handpicked some of the best savings accounts going around - be sure to start your comparison here!
Compare top savings accounts
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Savings Account
5.35% p.a. (for $0 to $250,000)
4.75% p.a.(for $0 to $1,000,000)
Yes up to $250,000
Bonus variable rate is available for the first 4 months.
Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
CompareCompareSavings Account
Enjoy a high interest savings account with no account keeping fees to pay. Save up to 10% on eGift cards at over 50 retailers with Macquarie Marketplace. Multiple 2024 Mozo Experts Choice Award winner.
- Maximum rate
- 5.35% p.a. (for $0 to $250,000)
- standard interest rate
- 4.75% p.a.(for $0 to $1,000,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Bonus variable rate is available for the first 4 months.
- Access
- BPay, Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must have a Macquarie Transaction Account to link with.
Read our Mozo Review to learn more about the Savings Account
-
Mozo experts choice awards won:
- High Interest Savings - 2024
Savings Maximiser
5.50% p.a. (for $0 to $100,000)
0.55% p.a.(for $0 and over)
Yes up to $250,000
Deposit $1,000 into a personal ING account, make 5 eligible transactions with a linked Orange Everyday account and grow the balance each month.
Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
CompareCompareSavings Maximiser
Great variable rate every month when you grow your balance each month in addition to other eligibility criteria. No ING fees to pay. Save even more with ING Everyday Round Up. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Maximum rate
- 5.50% p.a. (for $0 to $100,000)
- standard interest rate
- 0.55% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- For customers who deposit $1000 from an external source into a personal ING account (excluding Orange One and Living Super), make 5 eligible transactions and grow their nominated Savings Maximiser account each month so there is more in the account at the end of the month than there was at the start of each month (excluding interest). The total bonus interest rate is available on balances up to $100,000 on one Savings Maximiser the next month after meeting eligibility.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must be linked to an Orange Everyday transaction account to receive the bonus rate. Where multiple Savings Maximiser Accounts are held, the bonus rate is only applied to one nominated account.
Read our Mozo Review to learn more about the Savings Maximiser
-
MoneyMAX Account
No Current Offer
4.70% p.a.(for $1 and over)
Yes up to $250,000
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
CompareCompareMoneyMAX Account
Unlimited access 24/7 via Banking App, Phone & Internet Banking. Interest is calculated daily and paid monthly. No transaction fees or monthly service fees. No minimum balance or withdrawal restrictions. Online access only.
- Maximum rate
- No Current Offer
- standard interest rate
- 4.70% p.a.(for $1 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- n/a
- Access
- BPay, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Branch access for deposits only.
Read our Mozo Review to learn more about the MoneyMAX Account
-
Savings Accelerator
3.55% p.a. (for $0 to $50,000)
2.85% p.a.(for $0 to $50,000)
Yes up to $250,000
New customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000.
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
CompareCompareSavings Accelerator
Enjoy the flexibility to access your funds with no monthly deposit requirements or lock-in terms. No ING fees to pay. Mozo Experts Choice Awards Everyday & Savings Bank of the Year winner for 2024.^
- Maximum rate
- 3.55% p.a. (for $0 to $50,000)
- standard interest rate
- 2.85% p.a.(for $0 to $50,000)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- New ING personal savings customers receive an introductory bonus 0.70% p.a. variable kick starter rate for the first 4 months on balances up to $500,000. Reverts to variable ongoing rate.
- Access
- Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must link to a transaction account
Read our Mozo Review to learn more about the Savings Accelerator
-
Life - 18-29 years old
5.20% p.a. (for $0 to $30,000)
1.85% p.a.(for $0 and over)
Yes up to $250,000
Make 5 eligible card purchases per month with a linked Westpac Choice account, make one deposit and grow the balance each month.
Are you 18 - 29 years of age? Earn up to a generous variable interest rate on your savings when you spend and save with Westpac. For individuals aged 18 to 29 on Westpac Life account balances up to $30,000.
CompareCompareLife - 18-29 years old
Are you 18 - 29 years of age? Earn up to a generous variable interest rate on your savings when you spend and save with Westpac. For individuals aged 18 to 29 on Westpac Life account balances up to $30,000.
- Maximum rate
- 5.20% p.a. (for $0 to $30,000)
- standard interest rate
- 1.85% p.a.(for $0 and over)
- Govt Deposit Guarantee
- Yes up to $250,000
- account fee per month
- $0.00
- Maximum rate conditions
- Make 5 eligible card purchases per month with a Westpac Choice account and min 1 deposit and higher balance than at the beginning of the month in Life savings account.
- Access
- Branch access, Phone banking, Internet banking
- Minimum balance
- $0.00
- Other restrictions
- Must hold a Westpac Choice transaction account. If 5 eligible card purchases are made each month, but savings account balance has not increased, a 2.00% interest rate still applies.
Read our Mozo Review to learn more about the Life - 18-29 years old
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^See information about the Mozo Experts Choice Savings Account Awards
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