Nigerian businesses are cutting down the size of their products and reducing quality to retain customers amid surging production costs, BusinessDay findings show.
This phenomenon widely known as “shrinkflation”, is the process of items shrinking in size or quantity, or even sometimes reformulating or reducing quality, while their prices remain the same or increase
I’ve been buying coaster biscuits for years, it’s my favorite and I recently noticed that the number of pieces in it has reduced. This has become a normal thing across several commodities, pure water for example is labeled 50CL but its content weighs much less than stated,” Adejumo Toriola told BusinessDay.
BusinessDay had earlier reported that the rising cost of energy and foreign exchange (FX) liquidity constraints is pressuring the cost of operations of manufacturing companies in Nigeria.
Also, the headline inflation rate and food inflation rate have continued to witness a monthly increase, affecting both manufacturers and consumers of thieve commodities.
According to the National Bureau of Statistics (NBS), the country’s food inflation, which constitutes 50 percent of the inflation, rose by 23.12 percent in August 2022.
Ayorinde Akinloye, an investor relations analyst at Seplat Energy plc, said that most of them are stuck between maintaining product quality and increasing the price of their product.
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“At the moment, they are doing the best possible they can in terms of bringing the balance between quality and cost,” he said.
Jessica Aboderin, a Lagos-based content writer spoke about how “shrinkflation” is affecting even fast foods and medium scale businesses.
“I usually buy this popular small chops in traffic, in the most part of this year, a plate containing four puff, one mosa, one spring roll, samosa and chicken was sold for N600, now the same plate contains four puff, one mosa, one spring roll, samosa and tiny meat for the same amount,” she said.
“I was initially angry about the changes and wondered why they didn’t just increase their price, on discussing it with the traffic vendors they explained that the price is their selling point and would lose customers with a hike in price.”
Confectionaries and bread are one of the most affected items of shrinkflation especially since the shortage in supply of wheat, a major component in bread production.
This led to a surge in its price, due to the Russsia-Ukraine war as both countries are major suppliers of the grain.
Irene Okocha explained that the quality of bread that maintains the same price it was before the war is really poor.
She said that those with a better quality have increased their price.
‘‘I now go for low quality bread that I don’t like the taste, all because of price,’’ she said
