https://www.investmentjunctions.com/: What is shrinkflation ?

What is shrinkflation ....

Before the discussion on this economic term, let's talk about two more economic terms, one is Inflation & other is Deflation.

what is Inflation in the Economy & how does it pinch our pocket

Inflation is the rate of increase in prices over a given period of time, in a market economy, prices for goods and services can always change. Some prices rise; some prices fall. Inflation occurs when there is a broad increase in the prices of goods and services, not just of individual items; it means, you can buy less for 100 today than you could yesterday.

For example: in the year 2010 one liter of milk cost Rs 20, now in the year 2023 one liter of milk costs Rs 50, so the cost increased within 13 years is Rs 30 it may pinch our pocket but we are bound to pay the price. increased cost.

What is deflation in the economy?

Deflation is when consumer and asset prices decrease over time, and purchasing power increases. Essentially, you can buy more goods or services tomorrow with the same amount of money you have today. This is the mirror image of inflation,

For example: let's assume In the year 2010 most of the people used to buy filament tube lights at Rs 100 ( 30 watts) per piece but now most of the people buy LED tubes at RS 100 (30 watts), now the retailer can't sell filament tube at Rs 100 ( 30 watts) , he/she should clear his/her stock at a discounted price, otherwise, that would be a bad inventory, this is deflation.

What is shrinkflation:

The situation when the price of a product stays the same but its size gets smaller: Shrinkflation is a cunning way of raising prices without actually raising the price of the product you are buying. Many products have been hit by shrinkflation.