Amsterdam - Almost three-quarters (70%) of Dutch consumers feel misled when the quantity and quality of products in stores decreases, and the price remains the same. This phenomenon is also known as shrinkflation. This is according to research* by Lightspeed Commerce Inc (NYSE: LSPD) (TSX: LSPD), the complete checkout and payment platform of entrepreneurs in retail and hospitality worldwide.
Smaller packaging
Retail entrepreneurs have faced rising costs for raw materials, transportation, energy and qualified staff. By selling packaging with reduced content or reducing quality, retail entrepreneurs save where possible and keep more on the bottom line. This happens frequently with food products, but also non-food products such as shampoo or toothpaste. In this way, retailers hope to avoid confronting customers with price increases.
However, this is not without consequences. More than half of the consumers in the Netherlands (53%) say they have less confidence in retailers that shrinkflate. Lower trust may mean that consumers will look for another (web) store. Over a quarter (28%) say that shrinkflation has changed their spending patterns. It is plausible that they now spend more money to still get the quantity of a certain product they need. 36 percent indicate that their spending pattern has remained the same despite shrinkage inflation, suggesting that they have had to remove desired purchases from their list.
'Now 10 percent less content'
The question is whether consumers prefer increased prices to contractionary inflation. Then we see that 37 percent prefer increased prices to contractionary inflation. 24 percent disagree and would rather not pay more, taking for granted that they are getting less value for their money.
"Our research shows strongly that opinions are far apart when it comes to shrinkflation in the retail sector in the Netherlands," says Ewout van Rossum, Regional Manager Benelux Retail at Lightspeed. "What does appear is that consumers want clarity. 46 percent of Dutch consumers have indicated that they don't mind shrinkage at all, as long as it is indicated. We notice that retail entrepreneurs often find it difficult to make the choice whether to increase the price or reduce the quantity. That's where we try to support them as much as possible. We can help them with this by providing insights into their inventory levels, their sales results, the customer base and staff costs. Based on these insights, they can make better decisions that suit their type of customer, and reduce costs where possible."
*About the study
The survey was conducted on behalf of Lightspeed by OnePoll, an independent market and research firm. A total of 1,000 Dutch consumers participated in this survey.
Lightspeed's complete enterprise platform supports businesses that are the backbone of the global economy. It helps entrepreneurs simplify, scale and deliver exceptional customer experiences. Our online entrepreneurial platform transforms and unifies digital and physical processes by selling through multiple channels, expanding to new locations, global payments, financial solutions and access to supplier networks. Founded in 2005 in Montreal, Canada, Lightspeed is listed on the New York Stock Exchange and Toronto Stock Exchange (NYSE: LSPD) (TSX: LSPD). With teams based in North America, Europe and Asia Pacific, Lightspeed serves retail, hospitality and golf businesses in more than 100 countries. For more information, visit www.lightspeedhq.nl. Follow us on Linkedin, Facebook, Instagram, YouTube, Twitter.
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