INFLATION
Inflation is the highest that it has been in 40 years. It was recently reported at 8.5%. That’s high!
Some people who are being blamed for the rising inflation say that the most important figure is not general inflation, which is 8.5%, but core inflation, which is 6.2%. Core inflation—that was a new term to me. I learned that core inflation is when you take out gasoline and food products to figure the inflation rate. Explain this to me: “How are we going to live without buying food or using medicine?”
When you look at inflation, what do you see? Through human eyes, trying to combat it is to utilize deception. Looking at it through God’s eyes, we need to utilize innovation. Let me explain.
One way of dealing deceptively with inflation is shrinkflation. This is the method that many companies are using to offer less product and maintain the same price or increase the price. A good shopper has to be eagle-eyed to notice the slight change. It’s a way to disguise inflation. You see it mostly in food and beverages, especially those that have a large turnover.
Shrinkflation works best when people focus only on prices. Tetley Tea reduced the number of tea bags sold in one box from 100 to 88. Coca-Cola reduced the size of its large bottle from 2 liters to 1.7 liters. Kraft slashed the weight of Toblerone bars from 200 grams to 170 grams. Shrinkflation puts less pretzels or cookies or Doritos or toilet paper rolls in a package and keeps the same price.
Marketing experts are assuming that consumers would balk at seeing rising prices, but they wouldn’t notice the fact that they are getting less in a product. Sounds to me like marketing gurus have figured out that most of us buying things are so focused on price that we don’t recognize the amount of what we are getting. If we think the price is staying the same, we will buy it.
It’s obvious that if you can reduce the product’s weight, quantity, or volume and keep the same retail price, you can improve your profit margin. But there is a better way. Innovation. If you believe in your product, then focus on innovative marketing of its value.
I like the spirit of AriZona iced tea. That company hasn’t raised the price of its iced tea since 1992. For thirty years, the 23-ounce can of iced tea has been $0.99. If you adjust the thirty years for inflation, you could argue that it costs about half as much as it did in 1992.
The AriZona tea company is not practicing shrinkflation. They figure that a short-term profit would ultimately push away customers. They want to not only keep customers but add more. Their market share has increased every year. Today, AriZona has a 16% market share in the ready-to-drink space!
I like the strategy of AriZona tea. Believe in your product, keep the same price, advertise what you are doing, and grow. I vote we let AriZona iced tea run our economy for a month!
So, what is it—shrinkflation or innovation? In all fairness, shrinkflation is not illegal if the company labels its product clearly and accurately. But being legal does not negate deception!!
Christianity doesn’t practice shrinkflation, and inflation hasn’t affected it. The cost of becoming a Christian has been the same for thousands of years. (Luke 9:23-25) We do need to be innovative in sharing the Good News! (Acts 5:42)
How are you handling inflation?
