Skimpflation: Where You Pay Full Price, but Get the ‘Lite’ Version

***************************************************************************

Subscribe to Economics In A Nutshell if you enjoy reading articles like this!

***************************************************************************

I've previously written about inflation and shrinkflation. Now, it's time to look at skimpflation - the new trick on the block!

Have you noticed the quality of goods or services going down? Perhaps its fewer amenities at hotels, more watery drinks at restaurants, or even thinner fabrics in clothes. Things still cost the same, but the product isn't what it used to be.

That's skimpflation.

It's slightly different from shrinkflation, which is when the size of the product becomes smaller (like fewer cookies in a bag, or less chicken in your chicken rice).

But just like its good friend shrinkflation, the root cause of skimpflation is often because of inflation. As companies face rising operational costs, such as higher labour or material expenses, one way to cut costs is to reduce the quality of their goods.

Here's an example of shrinkflation vs skimpflation:

• Shrinkflation: fewer cookies in a bag
• Skimpflation: using less butter, so they don't taste as good

And unfortunately for consumers, skimpflation is even harder to spot than shrinkflation. After all, it's relatively easy to count the number of cookies in a bag. But much more difficult to detect that the manufacturer is using less butter.

Have you come across examples of skimpflation in your daily life?