Shrinkflation is the next big issue on the menu. If you are smart, you’ve probably already caught onto the trend.
The question is whether you’ll keep falling for it and perhaps even implement it yourself, or if you’ll win by taking a wiser, and maybe still contrarian approach.
Inflation And Shrinkflation: A Double-Edged Sword
Not only have we continued to deal with hyperinflation, which continues to grow with current Fed rate hike actions, but it is being compounded by shrinkflation. This means you might pay three times as much for an order of French fries today, and get a third smaller portion too.
Burger King is finding itself in hot water with this issue, due to a lawsuit around the size of its burgers. Many, many others, across so many industries have been doing this too.
Bloomberg points out the pain this has caused in the travel industry, and the dramatic drop in value travelers are reporting.
Meanwhile, many companies have been alienating their best customers by implementing frustrating AI chatbots.
Banking is a notorious sector for this, and constantly hits customers with more fees for less service. Recently the Fed has issued more notices to banks requiring corrective actions to shore up their positions after other banks have failed. This unfortunately may cause many to act in a short-sighted manner, which compounds the issue and accelerates their demise.
Biting Back
Both corporate and individual consumer customers begin to appear to be biting back, at last.
Credit data being reported by banks shows them running out of money. They just can’t keep up with inflation, and juggle mass layoffs at the same time. They are running out of cash savings and reserves, and are finally stopping paying many of their bills.
Anticipate a consolidating and compounding effect as they shift away from companies burning them with shrinkflation, and moving to where the most value and best deals are.
This will apply to food, housing, banking, software, streaming TV, travel, banking, and the investment sector.
Those who give them the best value will keep compounding their gains, while trouble will snowball for others, even the ones who got away with these practices for many years.
You Don’t Have To Do This to Your Customers
Yes, in order to make it work, you have to be more disciplined financially. You have to pick better deals, and not be lazy or short-sighted. You must step up, and go above the norm, with personal human service, still offer strong returns, and increase reporting and transparency, as well as liquidity options.
Do this, and it will pay for itself. You’ll also feel a whole lot better about the work you do too.
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Photo by Fernando @cferdophotography on Unsplash
Article Source: https://nngcapitalfund.com/managing-shrinkflation-as-an-investor/
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