Honey, they’ve shrunk the kids’ chocolate bar

Honey, they’ve shrunk the kids’ chocolate bar

You may not have noticed it, but you may be getting less bang for your buck. The price of your favourite brand of noodles or biscuits may have remained constant despite inflation, but what about the quantity?

When Abhishek Mathur, a student, was told by his friends that the ubiquitous Rs 10 Maggi pack now had 20% less quantity, he was less than amused, although he had not noticed the change.

Chances are most people are buying soaps, bread and biscuits thinking companies have not passed on to the consumer the higher prices in packaged goods, but to protect margins amid rising costs, food and fast moving consumer goods companies are cutting down on quantity — grammage in trade parlance.

While companies refused to comment, market watchers said hiking prices at regular intervals is not an option to tackle the increasing input cost— from wheat, sugar and oil to wages. Consequently, a packet of Britannia’s Good Day biscuits weighs 15% less, though the price remains the same at Rs 10. Ditto for Parle’s Hide & Seek biscuits and Cadbury’s Dairy Milk chocolates.

Experts say it is helpful in case of impulse buy items like biscuits, snacks and chocolates as that is where cutting down on weights can help companies protect their volumes.

‘It’s definitely a win-win situation for companies’

Experts say reducing quantity while maintaining a constant price, especially of food and fast moving consumer goods, help companies protect their volumes.

“The FMCG category is highly price sensitive. Prices of items can be increased only to some extent. Reducing grammages (quantity) will help these companies retain their customers as well as their market shares,” said Pratichee Kapoor, associate director for retail at consulting firm Technopak.

For retailers across cities, the move has hardly spelled a difference over the past six months since the trend started. Most retailers continue to witness significant growth, despite price rises and quantity cuts. Food and personal care items are rarely potential areas of compromise for consumers, they reason.

“You cannot say that if the quantities are reduced or prices increased for these essential items, people won’t buy them. Definitely it’s a win-win situation for companies,” said Krishan Malik, a retailer in South Extension. As opposed to cutting down on expenses for groceries and other impulse items, consumers prefer cutting down on other indulgences such as frequenting fine dining outlets, shows a study conducted by Nielsen, a global information and measurement company.

“It’s the consumers in the middle of the pyramid that are not much affected by these cuts in grammages. If the company succeeds in communicating better value proposition to this section, the strategy is most sustainable for them. Impulse items, especially, can protect their volumes by going for grammage reductions,” said Raj Hosahalli, executive director, Nielsen India.

So, the next time you go shopping, make sure you don’t end up buying smaller quantities while staying within the budget.

Most retailers continue to witness significant growth, despite price rises and quantity cuts. Food and personal care items are rarely potential areas of compromise for consumers, they reason

Courtesy: http://timesofindia.indiatimes.com

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