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Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

theguardian.com

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Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#231

Post by ta1243 »

Manuel_D wrote: post #205
justinclift wrote: post #196

Earlier quoted context omitted.

Here in Australia we seem to be having high inflation of food, which the main supermarkets (a duopoly) are blaming on the cost of goods. Meanwhile, they've both reported their highest ever company profits. :( So, clearly they're full of shit about the cost of goods being the cause rather than their own price gouging.

Record profits in a period of inflation is not surprising. If the value of the Australian dollar halves, then a company doubling it's raw profit figures is really just staying maintaining the same profits in real value.

Record profits as a percentage of revenue.

The problem in Austrialia is a lack of competition, hence Woolworths can get a 5.9% profit compared with say Tesco in the UK with 3.8% profit (the UK having far more competition)

Not only that but while demand is decreasing, profits are increasing. That's a ridiculous system and shows a broken market.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#232

Post by vkou »

Miraste wrote: post #142
eddtests wrote: post #123

Earlier quoted context omitted.

Why does it cause such higher margins?

The rather soulless economics answer is that the companies want to make the same profit as before the inflation, so they need higher margins on individual sales to make up for the reduction in volume. Since demand doesn't drop, this is a feasible strategy.

That answer doesn't make sense, because surely, companies want to increase their profits regardless of whether inflation is happening or not.

The real answer is that when inflation is happening, it provides an easy excuse for raising prices far beyond the cost of your inputs. Everyone expects prices to go up, so they don't balk at yours going up faster than inflation.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#233

Post by programmertote »

ericpauley wrote: post #210
programmertote wrote: post #80

The worse combo is shrinkflation with significantly increased price. I used to buy Arm and Hammer detergent (250 FL OZ) from Costco for ~$11 about a year ago. Last week, I went to Costco and saw that they have reduced the size of the container (in a very subtle way so it is hard to notice) with 200 FL OZ and charges $14.89. That is like double rip-off. My salary did not increase 35% between this and last year. For Ch…

FYI on the detergent point: the new bottle may be more concentrated. I saw this too but when I compared the two bottles closely the dose size was also reduced (and I suppose the detergent more concentred, though hard to verify).

The old one is 195 loads and the new one is *supposedly* 200 loads. I never really paid attention to those load numbers because in the end, I just use the measure cup (that comes with the container).

Thanks for raising this subtle point though. :)

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#234

Post by everybodyknows »

> Consumer groups say shrinkflation is a widespread practice, which supermarkets like Carrefour are also guilty of in their own-label products.

No reason to doubt this, given:

> “Obviously, the aim in stigmatising these products is to be able to tell manufacturers to rethink their pricing policy,” Stefen Bompais, the director of client communications at Carrefour, said in an interview.

Long story short, Carrefour doesn't actually give a shit about the deception of customers, except to the extent that their natural rage can be redirected against its suppliers in order to soften negotiating positions. Shrinking their margins either helps maintain total sales revenue, or shifts a larger share of the operating margin to Carrefour.

Carrefour cares about volume pricing, not the size of the packages.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#235

Post by josu »

justinclift wrote: post #196
josu wrote: post #171

Earlier quoted context omitted.

Do not buy into that narrative. This inflationary process has been mostly driven by monetary policy. Margin increases are the result of businesses trying to navigate an inflationary period. These margin increases are not resulting in increased profits across the board (there are some notable exceptions). For example, Carrefour's profits in 2022 were about the same as in 2019. [1] From the article you linked: "Profits…

Here in Australia we seem to be having high inflation of food, which the main supermarkets (a duopoly) are blaming on the cost of goods. Meanwhile, they've both reported their highest ever company profits. :( So, clearly they're full of shit about the cost of goods being the cause rather than their own price gouging.

I'll just quote myself.

>Do not buy into that narrative.

Would you mind sharing the data? I've done a quick search, but I can't confirm what you said.

I found this, which contradicts what you said, but Statista is not super reliable: https://www.statista.com/statistics/1116200/australia-net-pr...

But even if it's true, and they recorded the largest profits, the catalyst still is the monetary policy. If businesses could just price gauge their clients, they would have already done it before. The goal of a corporation has always been to maximize utility, and this hasn't suddenly changed; so ask yourself, why are they raising prices now.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#236

Post by mitthrowaway2 »

Cthulhu_ wrote: post #151
badcppdev wrote: post #37

This is such a good idea. I know that everyone in the Western World is told that they eat too much but people need to be able to buy food and eat it. And if the same packaging this week has 90% of what it had last week then then consumers are going to suffer. In the UK many people rely on Food banks and parents skip meals to feed their children. Cutting the amount of food in a package in a manner that is not even vis…

I wish there was legislation in place that sets legal standard sizes; for one, it would allow for more uniform packaging, allowing reuse between brands and reducing trash. It would be more predictable box / pallet sizes, reducing transport costs. And it would give consumers more security, even with the mandatory price per liter / kilo notices which are often hard to read. One example of shrinkflation / cost fuckery h…

I've been saying this for ages. There are so many second-order benefits. For example in Japan, books are virtually all a standard size, and so bookshelves are built to match. Lets you fit more books in a small home.

When packages are random sizes and always varying, it's impossible for anyone in adjacent industries to develop synergies.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#237

Post by nebula8804 »

julienfr112 wrote: post #137
transcriptase wrote: post #35

It’s incredible to me that MBAs are still able to pitch “what if we made the product deceptively smaller but charged the same price?”, and don’t get thrown out a window. As if that’s a novel sustainable long-term strategy in CPG.

MBA people can also be shrinked : We only need 80% of you sales people, with chatgpt and co ...

The C suite and MBAs will be the last to be outsourced to ChatGPT. What we need is more new companies entering the fray. The problem is why would you enter this industry with its terrible margins when you could start a tech company instead?

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#238

Post by marcosdumay »

langsoul-com wrote: post #85

Chocolate bars are most notorious for this. Someone needs to do a 10 years ago comparison and there's a massive difference. These days, chocolate bars are all bite sized.

I don't know how much of this is shrinkflation and how much is companies adjusting to modern preferences.

Lots and lots of people prefer candy in small packages.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#239

Post by orangepurple »

Brybry wrote: post #184
vasco wrote: post #131

Earlier quoted context omitted.

Temporarily and in a localized way, yes. For example, if there's a natural disaster, and the people in power aren't dumb, they'll let prices float instead of putting caps in place, and everyone will be incentivised to rent big trucks full of water bottles and sell it for 20-50x the normal price. For the affected people it makes sense because now they can drink water, and if the prices were controlled nobody would mak…

> if there's a natural disaster, and the people in power aren't dumb, they'll let prices float instead of putting caps in place I think most states that experience natural disasters have price gouging laws that make it illegal to raise prices, during a declared emergency, beyond the level required by increased costs. Or at least I know Louisiana[1] and California[2] do. And here in Louisiana we've had a lot of disast…

I have been through multiple natural disasters in the Houston Texas area over some years and I have seen first hand that these price caps cause shortages resulting in people that need supplies not being able to obtain them. The people wanted price caps in the name of preventing price gouging and the state state obliged: the majority of people get nothing and everyone is happy.

Re: Carrefour puts ‘shrinkflation’ price warnings on food to shame brands

#240

Post by ericpauley »

programmertote wrote: post #233
ericpauley wrote: post #210

Earlier quoted context omitted.

FYI on the detergent point: the new bottle may be more concentrated. I saw this too but when I compared the two bottles closely the dose size was also reduced (and I suppose the detergent more concentred, though hard to verify).

The old one is 195 loads and the new one is *supposedly* 200 loads. I never really paid attention to those load numbers because in the end, I just use the measure cup (that comes with the container). Thanks for raising this subtle point though. :)

Turns out (in my case) both cups were identical, but the old bottle said to use the B line and the new one said to use the A line.

Clearly I spent far too much time overanalyzing this…

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