Omnichannel

'Skimpflation’ reflects higher consumer cost challenge

Adobe Stock.

June 13, 2023

Some retailers are resorting to "shrinkflation" and "skimpflation" to deal with inflation and conserve resources.

Shrinkflation is when a company reduces the quality of goods and services and skimpflation is when businesses use cheaper ingredients or part or reformulate a product that is unknown to the consumer, according to Mikel Lindsaar, CEO and founder of StoreConnect.

He's advising retailers to avoid the deceptive practices as consumers are quick to catch on, according to a press release from StoreConnect on how some small to mid-size businesses are doing in light of inflation.

"Retailers are struggling too, contending with higher prices for supplies and ongoing labor shortages. But skimping on quality and service can be much more costly in the long run, leaving businesses wondering why they are suddenly worse off than they were before," said Lindsaar in the release.

The retail segment should be looking to invest in smart technology, automating repetitive tasks and focus on delivering high-quality products and exceptional customer service, according to Lindsaar.

"Skimpflation is a symptom of a larger disease. SMBs shouldn't have to turn to deceptive practices as a remedy, which could be more harmful in the long run," he said.