Consumers prefer price increases rather than shrinkflation, new research reveals.
New research from TWC, in collaboration with the Federation of Wholesale Distributors, found 42% of consumers would prefer price increases, while 23% would prefer that the price point is maintained, and the pack size reduced. The remaining 35% said either option was fine, or they didn’t know.
However, convenience retailers were more divided on their views. Just under half (49%) wanted the price to be maintained, while 42% thought it was better to keep the pack size to be the same, with a higher price point. When it came to price-marked packs specifically, 80% of the retailers agreed that their shoppers would still buy PMPs if suppliers increased the price.
Sarah Coleman, Director of Communications at TWC, said: “It seems in general the consumer would rather pay a bit more for the same size product – we suspect that consumers have noticed decreasing pack sizes for some time to the point that many products are now disappointing them because they contain so much less than in the past. There is an acceptance that prices are rising across the board and therefore now is a good time to raise prices – within reason.
“Of course, there will always be a tipping point where a price will become unacceptable to the consumer. With this in mind, we have developed a price elasticity solution using a combination of wholesale, retail and consumer data, given the critical importance of getting the trade price right.”
