Skimpflation is replacing shrinkflation as a growing consumer complaint, with companies reducing product quality or service instead of package size.
Unlike shrinkflation, which gives consumers less product, skimpflation delivers an inferior product or experience while charging the same price.
Consumer advocates say the trend can be harder to detect because packaging and prices often remain unchanged, even as ingredients, portions or service levels decline.
Consumers have spent the last several years learning to spot "shrinkflation"—the practice of shrinking a product's size while keeping its price the same or even raising it. Now, economists say shoppers should also watch for a newer form of hidden inflation: “skimpflation.”
Instead of reducing the amount of a product, skimpflation reduces its quality, ingredients or level of service without a corresponding drop in price. The result is similar: consumers receive less value for the money they spend, even if the package looks the same and carries the same price tag.
Here’s an example: Before 2008, an airline ticket often included checked bags, a meal, or at least a beverage and a bag of peanuts. Now, passengers pay extra for those things.
The term has gained traction in recent months as economists, consumer advocates and researchers point to examples ranging from food manufacturers quietly swapping premium ingredients for cheaper alternatives to restaurants reducing portions of expensive ingredients while maintaining menu prices.
Less product vs. lower quality
The distinction between the two practices is straightforward.
Shrinkflation occurs when manufacturers reduce the quantity of a product without a proportional price reduction. A 16-ounce container of ice cream might become 14 ounces while selling for the same price, effectively increasing the cost per ounce. The Government Accountability Office (GAO) defines shrinkflation as product downsizing that raises the unit price consumers pay.
Skimpflation, on the other hand, keeps the size and price roughly the same but cuts corners elsewhere. That might mean:
Using cheaper ingredients in packaged foods.
Replacing real chocolate with chocolate-flavored coating.
Reducing the amount of meat, cheese or other premium ingredients in restaurant meals.
Eliminating services or amenities that were once included.
Increasing automation while reducing customer service.
In each case, consumers receive a product or service that costs the company less to provide but often sells for the same price.
Why companies do it
Both shrinkflation and skimpflation are responses to rising business costs.
Companies often worry that visible price increases will drive customers away. Instead, they may preserve the sticker price while reducing costs in less obvious ways.
During periods of high inflation, manufacturers may shrink package sizes. But when that becomes difficult—or when changing package sizes is too noticeable—they may instead alter recipes, substitute lower-cost ingredients or reduce service levels.
For example, a frozen meal may contain the same weight as before but include less chicken and more rice. A hotel may eliminate daily housekeeping while keeping room rates unchanged. A streaming service may introduce advertisements to plans that were previously ad-free without reducing subscription prices.
Consumers notice quality more than quantity
New academic research suggests consumers react even more negatively to skimpflation than shrinkflation.
A series of experiments published this year found that shoppers viewed quality reductions as less fair than either outright price increases or package-size reductions. Researchers concluded that quality cuts feel more deceptive because they change the actual experience of using the product, often without obvious warning.
How to spot skimpflation
Unlike shrinkflation, which can often be detected by comparing package weights, skimpflation requires consumers to pay closer attention.
Tell-tale signs include:
Ingredient lists that have changed.
Premium ingredients replaced by less expensive substitutes.
Smaller portions of meat or other high-cost ingredients.
Products that taste or perform differently than they used to.
Services that include fewer features while prices remain unchanged.
Consumer advocates recommend comparing unit prices, reading ingredient labels and paying attention to product reviews if a familiar brand suddenly seems different.