'Shrinkflation' looms this Christmas, says supermarket group

The president of the Philippine Amalgamated Supermarkets Association Inc. said shrinkflation is more likely to affect consumers than outright price increases this Christmas Season, as manufacturers try not to burden shoppers.

Shrinkflation occurs when the weight or size of a product is reduced while its price remains the same, effectively raising the cost per unit.

In an interview on the sidelines of the Anvil Business Summit at Shangri-La EDSA on Monday, association president Steve Cua said commodity prices are not expected to surge in December despite inflation climbing to 1.5 percent in August.

“Wala nang itataas ang bilihin eh. All sardine brands even went down by P1. What is happening is that the size and grammage of products are getting smaller (shrinkflation). Added to that are the new players in the supermarket who keep coming. They (supermarkets) are already losing markets,” Cua told reporters.

He added that stocks are sufficient to serve shoppers this holiday season, even with increased competition from discount chains such as DALI in Metro Manila.

Cua, however, said it remains uncertain whether prices of traditional Christmas staples such as hams, sauces, spaghetti noodles, creams, and mayonnaise will rise.

‘Acceptable practice’

Meanwhile, Century Pacific Food Inc. executive vice president and corporate group general manager Edwin Africa described shrinkflation as an acceptable practice in manufacturing — provided there is transparency with consumers.

“The way we think about it is… we obviously take a balance on our pricing and our cost. However, I think that, as a food product, we strive to ensure that we meet the consumer’s needs. I think it is done, but it has to be done only up to a certain point. We have seen other categories do it, not us, but we must understand how consumers accept the product experience,” Africa said in an interview with the DAILY TRIBUNE.

Century Pacific manufactures Century Tuna, Ligo, 555, Argentina canned and frozen meat, Coco Mama coconut milk, Birch Tree powdered milk, Angel milk products, and Kamayan condiments.

“What others are trying to do is balance value and price point. However, some companies overdo it by up to 20 percent. As a principle, I always believe that you have to be transparent with your consumers and you have to tell them what you are doing. The consumers are now smart, anyway,” Africa said.

He emphasized that Century Pacific will not be raising its prices this Christmas.

“Even though inflation remains relatively down, that has actually helped us. Many of the other factors, especially when it comes to logistics and how we send our stuff to supermarkets, probably could have affected us. But in general, we try to keep our prices as much the same as we can,” he added.

Africa said the company’s sardine brands will retain their P1 price cut until year-end, while Angel condensed and evaporated milk products will not see any increase. He said Century Pacific is targeting 10 to 15 percent growth this year.