Understanding the New Retail Strategy: Stretchflation

In the current economic climate, consumers are constantly navigating various pricing strategies employed by retailers and multinational corporations. While many are familiar with the term "shrinkflation," a new, more insidious practice known as "stretchflation" has emerged, further complicating the shopping experience and squeezing more money out of household budgets.

The Evolution of Retail Tactics

To understand stretchflation, one must first recognize the history of recent pricing trends. The podcast highlights several deceptive methods that have become prevalent during the cost of living crisis:

• Shrinkflation: The practice where "product sizes reduced but prices stay the same."
• Cheapflation: The strategy of "cutting out expensive, high-quality ingredients" to maintain margins.
• Greedflation: A phenomenon where food companies "hike prices far above the rise in their costs, using inflation as justification."

These tactics demonstrate that retailers often have "no qualms with using sneaky tactics to maximise profits," making it essential for consumers to remain vigilant and adjust their shopping habits.

Defining Stretchflation: A Disproportionate Increase

At its core, stretchflation involves a "simultaneous increase of a product's weight and price." While this might initially sound like a fair exchange for the consumer, the reality is far more calculated. The price increase is "disproportionately higher than the quantity increase," resulting in a higher cost per kilo or litre compared to the previous, smaller-sized options.

This strategy is particularly deceptive because it plays on the consumer psychology that "buying in bulk or larger quantity will save us money." By offering a "new format" that ostensibly provides "even more" of a product, brands mask the fact that the unit price has actually risen, often leaving customers feeling "ripped off once they realise the reality of the change."

Case Studies and Industry Backlash

French journalist Olivier Dauvert was instrumental in bringing this trend to light. A striking example cited in the podcast involved a snack product that saw its weight increase by 10% (from 100g to 110g), while the price rose by nearly 30% (from €1 to €1.29). Disturbingly, the packaging actively "boasted about the product being in a new format," which the podcast describes as inherently "misleading."

Canadian food researcher Sylvain Charlebois, writing in the Saskatchewan Star Phoenix, identified stretchflation as the food industry's calculated reaction to the public backlash against shrinkflation that began around 2022. Charlebois, in his comments to CTV News, referred to this phenomenon as "Shrinkflation 2.0."

The Consumer’s Dilemma

While it is technically true that raw material costs are higher than they were a few years ago, the lack of "regulations against what's being done" leaves consumers vulnerable. While checking the price per kilo is a recommended strategy, the podcast acknowledges the difficulty of this approach, noting that "looking at that for every product you buy is a lot of effort."

Ultimately, stretchflation is described as an "insidious way to deceive consumers." As these underhand and deceptive tactics continue to proliferate, the responsibility falls on the shopper to be observant and critical of packaging claims. Consumers are encouraged to be on the lookout for these patterns in their local stores, as awareness is the first line of defense against these evolving retail strategies.