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EMAC 2024 Annual


Shrinkflation versus Inflation: Unpacking Fairness Perceptions of Price Change Tactics
(A2024-119577)

Published: May 28, 2024

AUTHORS

Anders Mathias Mamen, Kristiania University College; Tarje Gaustad, BI Norwegian Business School

ABSTRACT

This study explores consumer perceptions of price fairness in two distinct price change tactics: retail price increases (inflation) and volume reductions (shrinkflation). Across two experiments with chips and detergents, consumers consistently viewed volume reductions as less fair and more deceptive than retail price increases. Participants experiencing volume reductions reported lower brand attitudes and purchase intentions compared to those in the retail price increase condition. The results highlight the inherent risks of employing shrinkflation; if consumers notice the reduced volume, negative responses are likely, leading them to shift to competitors. Overall, consumers prefer brands to be transparent and honest about price increases.