The Hong Kong Consumer Council (CC) has released findings in its latest issue of Choice magazine (Issue 576) revealing an endemic practice among manufacturers: reducing product net weight or volume while failing to lower retail prices, a phenomenon widely known as shrinkflation. The CC’s investigation, spanning three and a half years (January 2021 to July 2024), analyzed 62 supermarket items and found that over 90% of them had been downsized, with one breakfast cereal product experiencing a massive 30% reduction. This disguised price increase is effectively boosting the unit cost for consumers, with nearly 40% of the examined products seeing a per-unit price hike of over 10%, peaking at a substantial 26.2%.
The study aims to equip Hong Kong shoppers with the knowledge to recognize this hidden inflation and encourage more informed purchasing decisions. Shrinkflation occurs when the quantity of a product decreases, but its price remains stable or even increases, exploiting the consumer tendency to focus more on the package price than its contents.
Widespread Reductions and Price Increases
The CC tracked 62 items across three categories—43 food items, 17 household goods, and 2 pet foods—using data from its “Online Price Watch” platform. Fifty-eight of the 62 items witnessed volume or weight reductions ranging from 1.3% to 30%. The category most affected by downscaling was snacks, candies, and biscuits, which accounted for 24 of the reduced items.
One particular brand of cornflakes saw the most significant reduction, dropping from 250g to 175g—a 30% decrease. Another concerning trend was the “reduction upon reduction” tactic: three items, including one brand of cat food and two flavored sandwich cookies, were downsized twice within a three-year period. The cat food, for example, decreased its weight successively from 1.2kg to 1.1kg, and finally to 1kg, resulting in a cumulative loss of approximately 16.7%.
Despite these material reductions, prices remained rigid. Among the 39 items with traceable suggested retail prices, 16 registered a per-unit cost increase of 10% or more. The highest suggested retail price increase of 26.2% was found in a chocolate sandwich biscuit, which reduced its weight and simultaneously increased its retail price.
Analyzing actual average retail prices one month after the volume reduction, the CC found that 85% of items (51 products) increased in unit price, with increases reaching a staggering 103.6% for one unit of massage cream. Over a longer observation period of six months after the change, 95% of products maintained an elevated unit price compared to the previous six months.
Consumer Strategies to Combat Shrinkflation
To counter the opaque nature of shrinkflation, the Consumer Council advises shoppers to adopt several proactive strategies:
- Compare Unit Prices: Always check and calculate the price per unit (e.g., per 10 grams, per 100 milliliters, or per item) rather than focusing solely on the total package price. This metric provides the true cost of the product.
- Monitor Familiar Products: Pay close attention to the net weight printed on packaging for frequently purchased items. Manufacturers often disguise volume loss through subtle packaging changes or by adding phrases like “new formula” or “improved.”
- Utilize Price Comparison Tools: Leverage online resources like the CC’s “Online Price Watch” to compare unit prices across different retailers and over time, ensuring the best value for money.
While the overwhelming majority of products were reduced, four items did see an increase in quantity, including a chocolate bar, canned kidney beans, a baby lotion, and a hand wash, with increases ranging from 0.3% to 11.9%. However, these isolated instances do little to offset the pervasive nature of shrinkflation observed across the wider market. The CC strongly urges both manufacturers and retailers to enhance transparency, ensuring consumers can easily determine the true cost comparison between products.