Macroeconomics: UK economy, IB Economics
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Macroeconomics: UK economy, IB Economics
Economy
A brief overview of relevant articles for IB and A-Level all relating to the UK economy
Curated by Graham Watson
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Paying more for less: Which? lays bare size of ‘shrinkflation’ and ‘skimpflation’ | Consumer affairs | The Guardian

Paying more for less: Which? lays bare size of ‘shrinkflation’ and ‘skimpflation’ | Consumer affairs | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - January 20, 3:13 PM
Study highlights products whose pack size or amount of expensive ingredients have gone down but not price
Graham Watson's insight:

This time it's not greedflation but shrinkflation, with Which? drawing attention to the fact that a number of products have seen price rises accompanied by smaller sizes. 

 

The most blatant example of this, is Listerine Fresh Burst mouthwash: the size of the bottle has gone from 600ml to 500ml at the same time that the price has gone up by 52p. As a result, the net price increase per 100ml is 46%. 

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Shrinkflation: you’re right, from gin to butter, quantity and quality are taking a hit | Consumer affairs | The Guardian

Shrinkflation: you’re right, from gin to butter, quantity and quality are taking a hit | Consumer affairs | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - October 21, 2023 5:17 AM
The staples of your weekly shop are changing fast … and it’s not only in size
Graham Watson's insight:

This Guardian article details some examples of shrinkflation, with food manufacturers making marginal adjustments to the size and composition of their products. Alcohol levels in gin and wine have been reduced, and seemingly everything, from butter to toothpaste via coffee, shrinking in size. 

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A week of ups and downs in the UK economy

A week of ups and downs in the UK economy | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - August 19, 2023 2:58 AM
It could be a while before the economy can regain its rhythm, recent data suggests.
Graham Watson's insight:

Not much underlying theory but a nice state of the nation piece from Faisal Islam, just noting the push-me, pull-me nature of the current economy, with a mixture of good news and bad news, concerns about future growth, getting inflation down and the distributional effects of all of this. 

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From CPI to stagflation: how the UK tracks price rises and what key inflation terms mean | Inflation | The Guardian

From CPI to stagflation: how the UK tracks price rises and what key inflation terms mean | Inflation | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - May 23, 2023 4:03 PM
All the methods of cost of living calculations come with benefits and limitations
Graham Watson's insight:

Nice primer in the Guardian looking at inflation - how it is measured and some of the terms associated with it. There's clarity about the differences between CPI, CPIH and RPI as well as a little bit of background about stagflation, shrinkflation, greedflation and hyperinflation.

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‘It’s ridiculous’: shock as some UK grocery prices rise by more than 20% | Inflation | The Guardian

‘It’s ridiculous’: shock as some UK grocery prices rise by more than 20% | Inflation | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - May 21, 2022 2:22 AM
Which? analysis finds cereal, mushrooms and cheese among the items to have risen the most
Graham Watson's insight:

Evidence, both of inflation and shrinkflation is emerging from UK supermarkets, with staple foodstuffs rising by up to 20%, notably for cereals, cheese and mushrooms.

 

And when prices aren't rising retailers are often shrinking the portion size to control their costs.

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Cadbury shrinks size of Dairy Milk sharing bar

Cadbury shrinks size of Dairy Milk sharing bar | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - March 28, 2022 4:07 PM
Despite the size of the chocolate bar getting 10% smaller, the £2 price tag will remain.
Graham Watson's insight:

Another example of shrinkflation - with Cadbury reducing the size of the Dairy Milk 'sharing bar' by 10% but keeping the price at £2. 

 

Bad news for non-sharers everywhere, but a classic example of how producers are reacting to the cost of living crisis. 

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Cadbury accused of 'shrinkflation' as packs get smaller

Cadbury accused of 'shrinkflation' as packs get smaller | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - July 18, 2020 5:17 AM
Owner Mondelez says the move will fight obesity, but the firm faces accusations of "shrinkflation".
Graham Watson's insight:

Aha! I've not had a shrinkflation 'scoop' in quite a while, but Mondelez have obliged by announcing that multipacks of Cadbury's confectionary are going to contain smaller bars. 

 

The company claim that the move is part of a strategy to help tackle obseity, but it's hard to believe that a group responsible for manufacturing confectionary really has this at heart. The price of the packs are, of course, remaining unchanged, and consumers have been quick to suggest that protecting profits is at the heart of the change. 

 

I couldn't comment - but I'm sure that socially responsible companies, like Mondelez, always bear in mind the external costs associated with the consumption of their products. Ha, ha, ha.

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Brexit bites: more than 200 products subject to shrinkflation, says ONS | Business | The Guardian

Brexit bites: more than 200 products subject to shrinkflation, says ONS | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - January 22, 2019 3:09 AM
Firms use stealth tactics to offset rising costs and competition on the high street
Graham Watson's insight:

The Guardian looks at shrinkflation with more detail about how firms are trying to offset rising costs and high street competition. It's a good read - focusing on reductions in the number of fish fingers in a packet, the size of chocolate bars.

 

That said, the extent to which this has happened is limited, as the article notes: "The ONS estimated that only between 1% and 2.1% of food products in its sample had shrunk in size. It also only gathered details on the size and weight of about half of the 37,408 food and drink items in collected price data on a monthly basis."

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UK Christmas shoppers will pay more for less this year, say economists | Retail industry | The Guardian

UK Christmas shoppers will pay more for less this year, say economists | Retail industry | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - December 11, 2023 3:37 AM

Cost of festive season is up almost a quarter in three years, according to the Centre for Economics and Business Research

Graham Watson's insight:

The traditional cost of Christmas article has appeared in the Guardian with the Centre for Economics and Business Research noting that consumers are going to spend more for less this year. Evidence of the cost of living crisis and shrinkflation. 

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Galaxy chocolate bars now 10% smaller amid ‘shrinkflation’ | Chocolate | The Guardian

Galaxy chocolate bars now 10% smaller amid ‘shrinkflation’ | Chocolate | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - September 27, 2023 3:06 AM
Mars admits it has had to reduce size of product due to ‘growing pressures’ of rising costs
Graham Watson's insight:

Another example of shrinkflation, with Mars revealing that not only did they increased the price of the Galaxy bar from £1.39 to £1.50, but they've also reduced its size by 10%, all in the name of cost savings. 

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Hard-pressed UK shoppers feel food ‘shrinkflation’ | Consumer spending | The Guardian

Hard-pressed UK shoppers feel food ‘shrinkflation’ | Consumer spending | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - June 6, 2023 2:11 AM
Consumers increasingly claim that manufacturers are reducing the size of products, Barclays research finds
Graham Watson's insight:

More evidence of shrinkflation, reported by Barclays, with two-thirds consumers noticing the phenomenon as they shop, and as a result many have altered their shopping habits, buying in bulk and reducing discretionary spending. This is something that is also reflected in retail sales figures. 

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Confectionery firms try to sugar coat price rises

Confectionery firms try to sugar coat price rises | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - May 11, 2023 5:36 AM
Makers of sweets and chocolates are aiming to shield customers from their higher costs.
Graham Watson's insight:

This article highlights the phenomenon of 'shrinkflation' in the confectionery sector, with different responses to the higher price of sugar and cocoa.

 

US manufacturer, Candy Dynamics, manufacturer of Toxic Waste is prepared to admit that it's started to sell small sized packets, and whilst Scottish manufacturers Tunnock's admit to having passed on some of the 40% cost increases to consumers, they're still trying to find efficiencies that offset the rising cost of factors of production.  

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Unprecedented inflation ahead as Ukraine war adds to costs, says Unilever | Unilever | The Guardian

Unprecedented inflation ahead as Ukraine war adds to costs, says Unilever | Unilever | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - April 28, 2022 3:24 PM
Rise in energy and ingredient costs suggests consumers will have to pay more for well-known brands
Graham Watson's insight:

Here comes yet more inflation - or shrinkflation - as Unilver deems fit. 

 

However, this is particularly interesting, Unilever owns many mega-brands and will be keen to pass many of these price increases onto the consumer. It will be fascinating to see how much the price of their products rise in the next 12 months. 

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Smaller packs, same price: curse of ‘shrinkflation’ hits shoppers’ baskets | Business | The Guardian

Smaller packs, same price: curse of ‘shrinkflation’ hits shoppers’ baskets | Business | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - October 9, 2021 7:10 AM
Food suppliers are cutting pack sizes and raising checkout prices in response to rising costs
Graham Watson's insight:

You can't beat a bit of shrinkflation. Smaller bars, fewer snacks in a packet, all for the same price. Walkers, Smiths and even Persil have all adopted this approach in response to rising costs. 

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AED - Emirati Dirham
ZAR - Rand
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Shrinkflation: for those struggling, it's about more than just chocolate bars | Frances Ryan | Opinion | The Guardian

Shrinkflation: for those struggling, it's about more than just chocolate bars | Frances Ryan | Opinion | The Guardian | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.theguardian.com - January 23, 2019 2:43 AM
We’re used to chocolate bars shrinking while staying at the same price but it’s happening to many everyday products – and people living with food insecurity are paying the price, says Guardian columnist Frances Ryan
Graham Watson's insight:

The Guardian's Francis Ryan highlights the implications of shrinkflation for the poorest in society - worsening food security and increasing poverty.

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Shrinkflation: Bread and breakfast cereals most affected

Shrinkflation: Bread and breakfast cereals most affected | Macroeconomics: UK economy, IB Economics | Scoop.it
From www.bbc.co.uk - January 22, 2019 2:37 AM
Bread and cereal products are most likely to have shrunk in size, but remained at the same price.
Graham Watson's insight:

Lovely macroeconomic article that looks at an unusual phenomenon of 'shrinkflation' - which allows producers to maintain prices whilst actually supplying less.

 

As a result, inflation figures don't reflect rising prices, when in effect the consumer is getting less for their money. According to the ONS, it's breakfast cereals and bread where there's greatest evidence of this, although some products have increased in size.

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