Shrinkflation and Skimpflation
TL;DR
When a currency loses value, companies hide price increases by reducing the size (Shrinkflation) or quality (Skimpflation) of their products.
Shrinkflation
- Definition: Reducing the weight or count of a product while keeping the price and packaging nearly the same.
- Example: A cereal box that used to be 500g now contains 425g for the same $5.
- Why it happens: Consumers are more sensitive to price changes than to size changes.
Skimpflation
- Definition: Choosing cheaper, lower-quality ingredients or reducing service to maintain a price point.
- Example: A restaurant using vegetable oil instead of butter, or a hotel removing “free” daily cleaning.
- Why it matters: It leads to a “race to the bottom” where everything becomes worse over time to keep up with the dilution of money.
The Root Cause
Both phenomena are symptoms of a debased currency. Because the money is worth less every year, everyone is forced to “scrimp and save” just to maintain the illusion of old prices, destroying the quality of civilization in the process.