When the Packet Stays the Same but the Product Shrinks

Inflation has a familiar face. It appears on price tags, grocery bills and household budgets.

A product that once cost Tk 50 begins to cost Tk 55, and consumers immediately understand what has happened. But there is another form of inflation that is far less visible.

The packet looks almost identical, the printed price may remain unchanged, and yet there is less inside. The consumer pays the same money for less product.

This is shrinkflation, and its growing presence in Bangladesh reveals something more troubling than a few grams disappearing from a packet: it shows how inflation is quietly altering the relationship between consumers, producers and prices.

A recent report by Bonik Barta has documented this trend across a wide range of consumer products, from chips, biscuits and cakes to soap, toothpaste, shampoo and cosmetics.

A 15-gram packet of potato chips has reportedly become 10 grams while retaining the Tk 10 price. A 25-gram packet of Ruchi Barbecue Chanachur has fallen to 22 grams at the same price.

Olympic dry cake has reportedly declined from 38 grams to 25 grams, while All-time dry cake has gone from 25 grams to 22 grams.

These may appear to be insignificant reductions. For a household buying one packet, they are hardly dramatic. But inflation is rarely experienced through one packet alone.

Consider the mathematics. A 15-gram packet priced at Tk 10 costs about 67 paisa per gram. Once the same packet contains only 10 grams, the effective price rises to Tk 1 per gram.

The consumer therefore faces a roughly 50 percent increase in the unit price without seeing a single additional taka on the price label.

This is the peculiar genius of shrinkflation. The price remains psychologically stable while the real price quietly moves upward.

The same phenomenon becomes more striking when products are purchased repeatedly.

A family may buy biscuits for children, snacks for school, soap for bathing, toothpaste for brushing, shampoo for washing hair and beverages for occasional consumption.

Losing three grams here and five grams there does not feel significant.

Yet by the end of a month, the household has purchased considerably less for approximately the same expenditure. The inflationary pressure therefore becomes cumulative rather than visible.

This matters particularly in Bangladesh, where a large segment of consumers remains extremely price-sensitive.

For lower-income and lower-middle-income households, the question is often not which brand offers better quality but whether a product fits within a predetermined budget.

A Tk 10 or Tk 20 packet is designed precisely around this psychological and economic threshold. Raising the price from Tk 10 to Tk 12 may appear commercially risky.

Reducing the contents while keeping the packet at Tk 10 allows manufacturers to preserve the familiar price point while recovering part of their rising costs.

From the producers’ perspective, the calculation is understandable. Raw materials, packaging, fuel, transportation, electricity and labour have all become more expensive.

Unilever, for instance, has pointed to higher costs for imported raw materials and packaging, as well as increases in crude oil, plastic resin and palm oil prices.

PRAN-RFL Group has also indicated that packaging costs alone have risen substantially in recent months. When production costs rise, businesses have limited choices.

They can increase prices, reduce quantities, absorb the loss, change ingredients or reduce margins.

Yet understanding the producer’s predicament should not mean ignoring the consumer’s predicament.

The problem begins when both price increases and quantity reductions occur simultaneously. In that situation, consumers are effectively squeezed from both sides.

They pay more and receive less. The issue is no longer merely whether a company has the legal right to alter its package size.

It becomes a question of how transparent the market is and whether consumers can make meaningful comparisons.

There is also a psychological dimension that deserves greater attention. Consumers do not calculate the price per gram of every biscuit, soap or packet of chips they purchase.

They remember the familiar price. A Tk 10 product remains mentally a Tk 10 product even if its contents have fallen by one-third. This creates what might be called an illusion of price stability.

The packet tells consumers that nothing has changed, while the quantity quietly tells a different story.

Shrinkflation therefore exposes an important weakness in the way inflation is commonly understood.

Official discussions tend to focus heavily on headline prices. But consumers do not consume prices.

They consume goods. If the quantity of those goods changes, measuring inflation solely through the price printed on a package can conceal part of the pressure being experienced by households.

This is where regulators have an important role. The National Consumer Rights Protection Directorate has indicated that it will examine whether the quantity and price stated on packages remain consistent.

Such monitoring should not be limited to checking whether manufacturers have printed the correct weight.

Regulators should also track significant changes in unit prices and package sizes, particularly for widely consumed essential and low-priced products.

Retailers and manufacturers could also make the unit price easier to understand.

Consumers should not have to perform arithmetic in a supermarket aisle to discover that a supposedly unchanged Tk 10 product has effectively become 30 or 50 percent more expensive.

Clear information about price per 100 grams or 100 millilitres would make comparison easier and encourage competition based on genuine value rather than familiar price points.

There is, however, a deeper economic story behind all this. Shrinkflation is not simply a marketing trick. It is also a symptom of declining purchasing power.

When people’s incomes fail to keep pace with inflation, companies become increasingly reluctant to raise visible prices because they know consumers are already struggling.

The result is an unusual compromise: the nominal price is protected while the real quantity is reduced.

That compromise cannot continue indefinitely. If households repeatedly receive less for the same money, they eventually change their behaviour.

They may switch brands, reduce consumption, move toward cheaper alternatives or simply buy fewer products.

Lower demand can then feed back into businesses, production and employment. What begins as a strategy to protect sales can ultimately weaken consumption.

The real danger, therefore, is not that a packet of chips loses five grams.

It is that Bangladesh begins to normalise an economic environment in which the price label becomes increasingly disconnected from the actual value received by consumers

. Inflation is already eroding household purchasing power. Shrinkflation makes that erosion harder to see.

The packet may look the same. The price may look the same. But the bargain has changed. And unless consumers, regulators and policymakers start paying attention to the price of the product per gram, millilitre or unit, a significant part of Bangladesh’s inflation story will remain hidden in plain sight.

(The writer is an Academic, Journalist, and Political Analyst based in Dhaka, Bangladesh. Currently he teaches at IUBAT. He can be reached at  nazmulalam.rijohn@gmail.com)