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BN Shrinkflation Int Ws 152472
BN Shrinkflation Int Ws 152472
a. packages, products, or services are increased in size, but the cost stays the same
b. packages, products, or services are reduced in size, but the cost stays the same
c. companies no longer sell or offer certain packages, products, or services because they are
too expensive
a. Discuss this business dilemma with a partner. Make a decision and give reasons for
your decision.
You work for a dried pasta company. Your costs have increased by around 20% in the past six
months. So far, the price of pasta for the customer has stayed the same, but now you must make a
decision. Will you:
a. increase the cost of a 500g box of pasta by 20%,
or
b. reduce the amount of the pasta in a box to 400g and keep the price as it is?
3 Key words
a. Write the words from the box next to the definitions below.
Check your answers and your understanding of the words by using the same word to complete
the example sentence after each definition.
Then read the complete article to see how each of the key words is used in context
1. a specific problem in part of a process that causes delays to the whole process
Intermediate
5. the difference between how much money you get when you sell something and how much it costs
7. money that you make by selling something or from your business, especially the money that
The technician has been the settings on the machines this morning.
12. the unhappy feeling that you have when you are not satisfied with something
13. a way to describe something – especially a type of food – that is good for you
Our canteen offers meals that are freshly cooked each morning.
14. things that make it comfortable or enjoyable to stay, live, or work somewhere
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1 Inflation is everywhere. Labour shortages, 7 Such businesses are now turning to creative ways to
supply-chain bottlenecks and rising post-pandemic pass on costs or otherwise boost profits. That may
demand were already pushing up costs. Now mean providing less for the same price or tacking on
Russia’s invasion of Ukraine is squeezing the supply new fees. Both Hilton and Marriott have made daily
of food and energy. housekeeping services “opt in” for most properties,
which means guests don’t get it unless they ask. I
2 Some big companies have seemed happy to push recently spent four nights at a Best Western and was
the pain through to their customers: Procter & told there would be no housekeeping at all during my
Gamble and Unilever bragged that price increases stay. Most hotel breakfast buffets closed down during
had boosted revenue last year as they announced the pandemic, and many chains have been slow to
plans for more. reopen them and incur the additional costs. And Walt
Disney World last year retired its free line-skipping
3 But sometimes manufacturers prefer to be service and now charges for speedy ride access.
sneaky — or fear that customers will flee. So
today’s Doritos bags have five fewer chips and 8 UK pub group JD Wetherspoon is taking a different
mega packages of Cottonelle toilet rolls have lost tack. Chair Tim Martin says the chain has absorbed
28 sheets. Unilever is among those practising higher costs for some popular items, such as Beck’s
“shrinkflation”: bottles of Dove body wash recently beer and Bell’s whisky, with the goal of making up in
volume what it sacrifices on each sale.
dropped from 24 to 22 ounces in the US but can still
be sold for the same price. 9 At restaurants, cost-shifting strategies often revolve
around tweaking menus to avoid outright price hikes.
4 Mentions of changing product sizes shot up on Chefs may reformulate a dish to remove expensive
earnings calls at the end of last year, . says analytics ingredients or give it a new name and price. Entrées
firm Sentieo. “Pricing is just one of the levers in our that once came with two vegetable sides now have
toolkit . . . Pricepack architecture also becomes just one. Online menus, ordering and payment
critical in these inflationary times,” said Noelle apps help cut staff costs, while shorter menus allow
O’Mara of Tyson Foods, in one typical reference venues to order fewer ingredients, cut food waste
and capitalise on volume discounts. More deviously,
5 Shrinkflation doesn’t start and stop with packaged some establishments exploit the concept of “plate
goods. Service and hospitality providers, such as
cover”, says restaurant consultant Peter Backman,
hotels, restaurants and theme parks, are under even using decorative sauces and meat sliced diagonally to
more pressure to find creative ways to preserve make portions look more generous.
their margins. Sales and consumer demand for their
products were badly dented by Covid lockdowns. 10 The penny pinching is not going unnoticed. Covid
Revenue is rebounding, helped by widespread price was initially an acceptable excuse for reduced service
hikes, but these companies can ill-afford to alienate and empty shelves, but patience is wearing thin. US
customer satisfaction has fallen since 2018 to its
Intermediate
their guests.
lowest level since 2005.
6 Data from OpenTable show that global seated diner
numbers — including walk-ins —have only just 11 That discontent leaves companies scrambling to sell
recovered to pre-pandemic levels after the latest these product and services changes as something
Omicron wave. Hotels have had it worse. Global more wholesome. Cadbury owner Mondelez insisted
that a cut to the size of Wispa chocolate bars in its
room rates fell by more than 25 per cent during the
multipacks was part of a “proactive strategy to help
pandemic, so operators were digging their way out of
tackle obesity”. PepsiCo-owned Gatorade has said
a big hole even before costs started to rise.
Continued on next page
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Find key information in the article to fill the gaps in the notes.
Reasons for inflation and rising costs not enough workers, problems, people
wanting more of certain products and items as things
go back to normal again after the ,
Russia’s invasion of Ukraine causing problems in the
supply of (e.g., oil) and
(e.g., gas)
Types of shrinkflation in packaged food Packed products keep their price but are reduced in
and drinks size, e.g., less body wash in a , fewer
chips in a , fewer sheets of paper on toilet
rolls, sized chocolate bars, and bottles
of drinks.
Examples of shrinkflation in the rooms only if guests ask for
hotel industry housekeeping services, no free bottles of
items, encouraging guests to reuse
Examples of shrinkflation in restaurants adding more sauce and cutting meat at different angles
to cover the to make portions look
bigger, using cheaper , renaming dishes
and giving them higher prices, reducing the number
of side on a meal, cutting
costs by introducing online ordering and payment
Examples of shrinkflation in the Walt Disney World no longer allows certain people
leisure industry to jump to the front of a long or queue.
Instead, people can now pay extra per ride for quick
to rides.
Reasons companies give for their They are making their products easier to hold; they are
shrinkflation changes tackling problems such as obesity; they
are looking after the .
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5 Business language
b. Then find them in the article to check your answers and read them again in context.
1. labour architecture
2. pricepack hikes
3. earnings discounts
4. price pinching
5. volume call
6. penny shortages
b. a method of providing customers with a selection of products that meet their needs at a price they
are willing to pay
e. a conference call in which a public company discusses the financial results of a reporting period
d. Decide which of the word pairs you would like to learn and use them in sentences of your own.
6 Discussion questions
• Which of the things you noticed may help reduce people’s carbon footprint and improve
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their health?
• Now that you’ve read the article, what do you think? (you many use alternative adjectives).
Is ‘shrinkflation’ a sneaky or clever business strategy?
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a. Choose a consumable product that has been available for at least 50 years, e.g., Toblerone
chocolate, Haribo gummy bears, Heinz ketchup, Lucky Strike cigarettes, Persil washing
powder, Oreo cookies, etc.
Find out how these things have changed and developed over the past 50 years:
• packaging
• product size
• ingredients
• marketing strategies
How did they affect: sales, reputation, customer satisfaction, share prices, etc.?
b. Produce a timeline, poster, infographic or presentation slides with the information you found
and present it to the group.
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