Investigation of the effect of shrinkflation on consumer decisions in the framework of behavioral economics: An application in Tekirdağ

With the impact of economic crises, firms resort to various applications in their products to maximize the profits. One of these practices is to keep the price constant or increase it by reducing the size, weight and/or quantity of the products. This is known as "shrinkflation" in the literature. Unaware of these adjustments, consumers may tend to purchase the product without noticing any price increase. Products particularly affected by shrinkflation include basic food items, cleaning products, personal care items, and snacks. The purpose of study is to examine the effect of shrinkflation on consumers within the context of behavioral economics. The study investigated whether consumers perceive shrinkflation, which is considered one of the types of inflation, and whether their purchasing behavior is affected by this phenomenon. The study focuses on consumers residing within the boundaries of Tekirdağ province, and in-depth interviews are conducted as part of qualitative research methods. The data analysis was conducted using the "MAXQDA Analytics Pro 2024" program, where interviews were categorised into codes based on topics. The statistics of sub-codes, code relations browser, and hierarchical code-sub-code model were utilized for visualization. According to the findings, consumers claimed that although they did not have any information about shrinkflation, they mostly noticed that the size or weight of the products had decreased. It was observed that consumers tend to conduct comparative price analyses for products in which they detect shrinkflation. Despite the shrinkflation, on products they regularly use, the findings suggest that consumers are not necessarily inclined to abandon due to factors such as brand loyalty, familiarity, and trust. On the other hand, even if consumers find shrinkflation unethical, they indicate a reluctance to file complaints. This implies that consumer reactions are passive and limited, and they mostly continue their consumption despite shrinkflation. Behavioral economics assumes that individuals do not always make economic decisions based on complete information and rationality also are influenced by emotional factors, biases, and limited knowledge. The reactions of consumers when they notice shrinkflation emphasize the impact of psychological and emotional factors on economic decisions, as outlined in the literature on behavioral economics. The findings align with consumer purchasing behavior models such as AIDA, Howard-Sheth, Engel-Blackwell-Miniard, and the Henry Assael Model. The study contributes to the existing literature by providing the opportunity to portray the dynamics of the shrinkflation concept and its applications from different perspectives. Also, the study provides a significant perspective in understanding how consumers react to shrinkflation practices.