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Phil Agnew
I'm standing on a high street in Bolton, a large town just north of Manchester. Bolton has many things to be proud of. It was an Industrial revolution boom town, a 13th century market town with one of the 10 oldest pubs in Britain, and even has one of the world's oldest public libraries. But perhaps the thing the Trotters are most proud of is their bread. Bolton is home to Warburton, Britain's most popular bread brand. Established 148 years ago here in Bolton, Warburton slowly grew, becoming the second best selling food and drink brand in the uk, only behind Coca Cola. Most Brits like Warburton bread, but Bolton residents adore it. Almost 50% of people here in Lancashire buy Warburtons, compared to just 15% down in London. So this makes Bolton the perfect place for me to conduct an experiment. I will shrink Bolton's favourite bread and see if anyone notices. I want to find out if Shrinkflation works. I'll explore the psychology behind it, speak to an expert about it, and test it right here on this high street in Bolton. All of that coming up on today's episode of Nudge. The Ops Authority, hosted by Natalie Gingrich, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Every week on the Ops Authority, you'll hear transformational stories of powerhouse business owners who value business operations. You can't ignore the back end pieces that have to work together and flow smoothly to build a brand, grow a community or disrupt an industry. If the operations side of your business is a mess, putting out fires will always take priority, leaving no room for the behavioural science improvements that I think every business needs to make. So listen to the Ops Authority wherever you get your podcasts.
Grace Farrell
Hello, you are listening to Nudge with me, Phil Agnew. Now, before starting my Bolton bread experiment, I wanted to learn a little more about this practice of shrinkflation. Shrinkflation is one of the many hundred ways a company can increase its profit. Companies can run promotions, create new products, run ads, design new packaging. There is a long list of tactics available. And yet in recent years, many seem to resort to the least imaginative strategy possible. Shrinking the size of the product while keeping the price twice the same. Shrinkflation, as it's known really annoys me. Seeing a trimmed back Toblerone with the chocolate mountain peaks sliced in half genuinely makes me a little angry. But I'm a pretty pedantic consumer and I'm not sure if anybody else feels the same way. So to figure out if I'm a weirdo. Or if others also get annoyed by Shrinkflation, I spoke to an expert.
Consumer Participant
I'm Grace Farrell. I'm a consumer expert at Witch and co host of the Get Answers podcast.
Grace Farrell
Grace Farrell is which is resident shrinkflation expert and witch have been supporting consumer rights for the past 66 years, which.
Consumer Participant
Is a consumer champion. So we work to make life fairer and safer for all consumers in the uk. We look a lot at supermarket practices and supermarket pricing and how prices change over time and different things that consumers are noticing which are impacting their weekly.
Grace Farrell
Supermarket shop, which have been studying shrinkflation for the last few years. They are one of the leading experts on the subject in the uk. So to start, I ask Grace how they define shrinkflation.
Consumer Participant
A product will basically shrink in size, but the price will remain the same. A lot of the time. Sometimes the price even increases. So you find that you are getting less and spending more.
Grace Farrell
And this shrinkflation is happening with all types of products.
Consumer Participant
So according to research that WITCH did in January, we found that Listerine Fresh Burst mouthwash had shrunk from being 600 milliliters to 500 millilitres at one supermarket. It also went up in price by 52p. So this means that shoppers actually paid 21% more for 17% less mouthwash. And when you work it out per 100 milliliter, that's actually a price increase of 46%, which is pretty significant. We also saw it with PG Tips. So tasty Decaf Pyramid Tea bags. They went from containing 180 tea bags to 140 at multiple supermarkets. Although some retailers do drop the price sometimes when the products shrink, it's rarely proportionate to the amount that the product has shrunk by. And it also can serve to make consumers think that there's a price cut on something, when actually there isn't. It's a price increase when you consider the amount that you're actually getting for what you're paying. We've seen lots of other examples. So Andrec's Classic clean flushable washlets, Moist toilet tissue wipes. They went from 40 to 36 in a pack at Asda, Sainsbury's and Tesco. We saw it with gravy granules. Bisto Best Chicken gravy granules. They went from 250 grams to 230 grams at Asda and Morrison's. We've seen it with chocolate chip bars, we've seen it with coffee, with toothpaste, with butter, with biscuits. So it's really, across the board. I mean, we've even seen it with laundry detergent, where a pack that would have given you maybe 85 washes suddenly goes down to 83 washes. And so when you work out how much extra you're going to have to buy of this stuff over the course of the year, it does end up adding quite a lot to your budget. And it can just make it really hard for shoppers to budget properly when the amount that they're getting from products are changing all the time.
Grace Farrell
But do consumers notice? I ask Grace.
Consumer Participant
We know that consumers do notice this, though, because Witch ran a survey recently and found that 70% of shoppers had noticed shrinkflation over the course of that last year. So it's definitely something that people are getting wise to.
Grace Farrell
Which found that 77% of shoppers have noticed shrinkflation. I'll be honest, this surprised me. I found it a little hard to believe. If 77% of shoppers noticed shrinkflation, surely many would stop buying the products. Which also found that 75% said it wasn't transparent and 76% said it wasn't helpful. In other words, three out of four shoppers dislike shrinkflation. You would think that if the majority of shoppers were noticing shrinkflation and they didn't like it, then they would stop buying shrunken products. You'd think that these shoppers would go elsewhere, lowering the sales for Lirpak's shrunk salted butter and McVittie's shrunk digestives. But this isn't happening. Companies keep shrinking products because consumers keep buying. I think 77% of shoppers have noticed some shrinkflation, like me and my shrunken Toblerones, But I reckon far less, if any, notice all the shrinkflation happening around them. And this can be explained by some pretty compelling research. In psychology, there's growing evidence for something called change blindness. This is the inability to detect changes, especially when those changes are small and unexpected. The most difficult changes to notice are gradual changes, changes that occur in small increments. In 1967, the researcher Ono named the concept Just noticeable difference, which is the minimum amount of change that's needed for people to detect the change. Ohno found that very gradual changes can go unnoticed. This allowed the researcher to make greater changes slowly, without the subject noticing. A classic example of this is the frog in boiling water. The premise is that if the frog is suddenly put into boiling water, it'll jump out. But if the frog is put into tepid water, which is slowly brought to the boil, it will not perceive danger and it will be cooked to death. Now in reality, this old wives tale isn't true. Research shows that frogs will eventually jump out of the water as it heats up. But the story sticks in our minds because it speaks to some deeper truth within us. We all have heard stories or perhaps experienced gradual change that started off innocuously before becoming far more serious. Most of us have seen this happen within companies, families and societies Just Take Work from Home Policies during COVID most of us could work from home usually five days a week, but slowly this privilege has been taken away. Many companies force staff back to work immediately, but psychologically smart companies did it very slowly. The slow increments made the change far more palatable. Facebook is a good example. In July 2021 they shifted its policy to let all permanent staff work remotely for good. Then later they debated whether it would be worth having a few more staff in the office. In March 2023, Zuckerberg asked employees to find more opportunity to work with their colleagues in person. Then on June 1, Meta forced all employees assigned to an office to return for three days per week. Very slowly and very gradually they changed their policy to make it a bit more palatable, and I'm sure they'll change their policy again soon. This slow, subtle change made the return to work less salient, and I think the same is happening with our shrunken products. The changes are just below noticeable differences, making it impossible for consumers to realize. This is especially true for products because doing a side by side comparison with these shrunken products is almost impossible. Once the jar of coffee has shrunk, it has shrunk for good. All the coffee jars have shrunk, and unless you have an old jar sitting at home, you will probably never notice. Researcher Simons and Levine in 1998 showed the alarming extent of our inability to detect change when we can't perform a side by side comparison. For the experiment, a researcher would ask random passersby for directions. As the passersby started sharing the directions, two workers carrying a very large painting walked between them. Unbeknownst to the passerby, the researcher changed places with one of the workers behind the large painting. Symonds and Levine wanted to learn how many people would continue the conversation without knowing that they were talking to an entirely different person. Now, I think I'd notice if the person I'm chatting with suddenly changed their age, appearance, hair color, clothes, and voice, but the results of this experiment show that I'm probably wrong. 50% of the people in the study failed to notice that they were talking to a completely different person. Half of them didn't notice. Simons and Levine say this is because they didn't have a side by side comparison. Once the original researcher appeared next to the new worker, all of the participants realized that they'd been talking to the wrong person. Side by side comparisons are vital as they make spotting shrinkflation much easier. But maybe I'm wrong. Maybe I'm relying too much on the psychological evidence and not enough on real world behaviour. Maybe consumers can perceive shrinkflation after all, 77% of consumers in Witches survey said they did notice it. So after the break I head to Bolton to run my experiment. Will Britain's biggest bread lovers notice if I shrink their favourite bread? Let's find out.
Phil Agnew
Once on holiday, a local asked me to explain what marketing actually is and I struggled. How do you even begin to describe marketing? You have to generate leads, you have to score leads, you have to contact leads, you have to create content, you have to gather data. And the next day you'll need to do it all again. And you wonder if it's even working. It's clear that marketers are spread far too thin trying to do so many different things. But HubSpot really can help. With the help of Breeze, HubSpot's collection of AI tools and features like Content Remix can really help. With Content Remix, you can turn one piece of content into a suite of assets. With HubSpot, you can also pinpoint the best prospects with a predictive lead scoring system. And you can level up your campaign's KPIs with a new new analytics suite so your day to day becomes less busy work and more driving revenue through the roof. Even if all of that won't actually help me explain what marketing is, visit HubSpot.com marketers to learn more. Hello again, it's Phil here and I'm standing on Newport street in Bolton. It is a bit chilly but sunny in a sort of classic British or weather. I have just popped into the local supermarket and picked up a loaf of Warburton's farmhouse bread. I have carefully opened the packet, removed one slice of bread from the middle and repackaged it so it looks as good as new. The loaf is now 5.5% smaller. That is a pretty typical decrease for a shrinkflation product. Pringles shrunk by 7.5% last year, Magnum's ISO ice creams by 9.1% and Penguins biscuits by 12.5%. It's small enough for consumers, perhaps not to notice, but big enough for the manufacturers to bank a big profit. So I will show my shrunken bread to the lovely folk of Bolton to see if they realise. Now, I won't outright ask people if it looks smaller because that doesn't reflect how people buy. We don't go around shops looking for subtle changes in product sizes. No, we look at products for less than a second, confirm it's what we want and buy. So instead, I'll ask folks questions about the packaging, the design, the style, and.
Grace Farrell
I'll see if anybody is able to.
Phil Agnew
Independently notice that the product has shrunk. Okay, let's get started.
Grace Farrell
Over the course of an hour, I spoke to 12 folks from Bolton.
Phil Agnew
What is your name?
Local Resident
Gavin.
Consumer Participant
Sue.
Local Resident
Brendan.
Consumer Participant
Hello.
Local Resident
And Stephanie. Celia.
Consumer Participant
Diane.
Grace Farrell
First, I asked if they recognized the bread.
Consumer Participant
Yes, I do. Warby's bread.
Local Resident
Warburton's, yeah. Absolutely.
Grace Farrell
Recognize it?
Local Resident
Yeah.
Consumer Participant
I used to live behind the factory.
Phil Agnew
Really?
Local Resident
Yeah.
Grace Farrell
Everybody recognized Warburton's bread and all but one of my participants had brought it before.
Phil Agnew
Have you purchased this bread before?
Local Resident
I have, yeah.
Phil Agnew
Yeah.
Local Resident
Would you get it in Ali's? No. You would?
Phil Agnew
Yeah.
Local Resident
Yes, I have it before, yeah, Yeah.
Phil Agnew
I think there's.
Local Resident
Robinson is the best. Yeah. Both of them. Yeah. Use that. That's very good and amazing. Yeah, yeah, very good.
Phil Agnew
Have you. Have you bought this type of bread before?
Consumer Participant
Yes, I have, yeah.
Grace Farrell
Next up, I asked what they thought of the design.
Phil Agnew
What do you think of the design of the bread?
Local Resident
Well, it's. It's plain, innit, boy? It does what it says on the tin. You can tell what it is, can't you? When you look at it, the wrapper, it's a bit plain, boring. But the bread's nice.
Consumer Participant
I find the packaging unattractive.
Local Resident
Yeah, they should get a better one.
Phil Agnew
But it's not home.
Local Resident
It's good, yeah, it's nice. Tasteful.
Consumer Participant
It looks quite homemade.
Local Resident
A bit more sort of more rusticky than normal bread.
Consumer Participant
Well, that. That kind of bread, although it tastes nice and everything, I'd rather have brown.
Grace Farrell
Nobody at this stage noticed that the bread had been shrunk. So to try to prompt them, I asked them if they noticed any difference between my loaf of bread and the ones they'd seen or bought before.
Phil Agnew
Can you notice any difference between this loaf of bread and the. The normal life of bread you buy?
Local Resident
I wouldn't. I won't particularly say so, no. Why? Is it a new one? It's not.
Consumer Participant
Well, no, probably not.
Phil Agnew
Do you notice anything different between this loaf of bread, I've got my hand and the ones you've seen in your shop, just the plain blue and white.
Grace Farrell
I don't think Wobbutons normally is blue.
Consumer Participant
And white with the colors.
Phil Agnew
All right. Is there anything different that you notice?
Consumer Participant
The clear packaging?
Local Resident
Yeah.
Grace Farrell
Most people couldn't see a difference. So with my final question, I asked them specifically about the shape and size of this bread compared to the ones they'd seen before.
Phil Agnew
What do you think about the size or the shape of the bread? Can you notice any difference there?
Consumer Participant
Oh, no.
Grace Farrell
Yeah. Why, is there something different there?
Phil Agnew
Well, there is.
Consumer Participant
I don't know whether it's the color with it being see through or it looks cheaper.
Local Resident
Yeah, yeah. Other thing is good, I don't know, just powdery in there and it just looks like. Just real fluffy. It's real fluffy soft bread. Yeah, yeah, yeah.
Grace Farrell
Despite this prompting, the majority of people still didn't notice that the bread had shrunk. In fact, one person thought my shrunken bread was bigger than the bread they bought in the store.
Local Resident
That one is bigger. That one's bigger.
Phil Agnew
This one.
Local Resident
This one is bigger.
Phil Agnew
This one's bigger. All right.
Grace Farrell
Out of the 12 people I spoke to, only two noticed the bread had been shrunk. Yeah, well, if I hold it, you.
Local Resident
See, like, did you decrease or something? The bag is very little bit big, so the proper year bag is so the pieces cannot be moved.
Grace Farrell
In total, I spoke to a dozen Brits about this bread and only two noticed that I'd shrunk the bread. Despite many having bought the same loaf for years, the vast majority had no idea it had shrunk. They would keep buying it as usual, losing out on a whole slice and giving the bakers a larger chunk of profit. My informal test backs up the science. Ono's 1967 studies were right. There is a small amount of change you can make to something that simply won't be noticed. And companies use this to boost their sales at the cost of US consumers. But there's a solution. There is an easy way for consumers to regain control and make informed decisions about what to buy. And it comes from care for in France. Here's grace from which to explain.
Consumer Participant
So, in France last year, the supermarket chain Carre4, it basically put labels on its shelves warning shoppers that certain groceries had shrunk in size. So it identified, I think, 26 products that had shrunk without a price reduction to match. And these were made by companies like Nestle, PepsiCo, Unilever, and so Carrefour put signs on the shelves in their stores that said this product has seen its volume or weight fall and the effective price charged by the supplier rise. So people thought it was quite a bold move really by Carrefour because it can potentially damage the relationship between retailers and manufacturers. But it served its purpose by making it obvious to people going about their daily shop that actually some items that they might buy every day had shrunk in size.
Grace Farrell
This directly links back to Simons and Levine's 1998 study. Without side by side comparisons, it's hard to spot changes, but it's impossible to miss the change once you see things side by side. This is why Carrefour's approach is so smart. It does not limit consumers choices or ban the brand. It simply provides the information consumers need to make informed choices. Therefore, the solution is fairly simple. A law that forces all major grocery stores to label items that have been significantly shrunk but not identically reduced in price. Without this, it's extremely clear what will happen. Companies will keep shrinking products because consumers will keep failing to notice. If I can fool 10 out of 12 bread lovers in Bolton, then surely a major national brand with a multimillion dollar ad campaign can do so too. Very few people can detect subtle changes. Small subtle changes below our difference threshold are basically invisible. In fact, I can prove it because I've tested it on you. Did you notice the subtle changes I made throughout this episode? Did you notice anything different as the episode progressed? My guess is you didn't. See, to prove my point, I started this episode by artificially lowering my tone. I gradually raised my tone as the show went on, so now it's artificially higher. This is what I sounded like at the start of the episode, and here's how I sound now. My guess is that almost nobody listening noticed this change. If you did, please do email me to let me know. These subtle changes that happen gradually are simply too difficult to spot. It helps companies bring workers back to the office, allows businesses to increase their profit by providing a worse product, and and even Let me start this episode of Nudge sounding like a husky James Brown.
Phil Agnew
OK folks, that is all for today. I'm ending today's episode from outside Bolton's oldest boozer, the Ye Old man and Skyf. This pub has existed since 1251. Unfortunately, the size of a pint hasn't shrunk since it opened. A massive thank you to Grace Pharrell from Witch for coming on the show today. Her wisdom was crucial in helping me un understand Shrinkflation I'd also like to give a shout out to Nick Kalinda's book Methods of Persuasion. His chapter on gradual changes informed much of today's show. As always, if you like today's show and you appreciate all the work that goes into it, please do support me either by sharing the show with a friend, following it on your podcast app, or perhaps even signing up to my newsletter. I spend 18 hours a week translating marketing psychology into an easy to read newsletter every Friday. So to sign up, just go to nudgepodcast.com and click Newsletter in the menu. If you want more from Nudge, follow me on LinkedIn or Twitter. I'm Phil Agnew on there or on TikTok, YouTube and Instagram. Just search for Nudge Podcast on there. Thanks again for listening folks. I'll be back next Monday for another episode of Nudge.
Grace Farrell
Cheers.
Nudge Podcast Episode Summary: "I Shrunk Britain’s #1 Bread. Did Anyone Notice?"
Released on November 11, 2024
Host: Phil Agnew
Podcast: Nudge
Episode Title: I Shrunk Britain’s #1 Bread. Did Anyone Notice?
Phil Agnew sets the stage on a bustling high street in Bolton, a town renowned not only for its rich history and heritage but also as the proud home of Warburton, Britain's most beloved bread brand. Established 148 years ago, Warburton has grown to become the second best-selling food and drink brand in the UK, trailing only behind Coca-Cola. With nearly half of Lancashire residents purchasing Warburtons compared to just 15% in London, Bolton serves as the perfect locale for Phil's intriguing experiment: **shrinking Warburton’s favorite bread to test if consumers notice the phenomenon known as shrinkflation.
"I will shrink Bolton's favourite bread and see if anyone notices. I want to find out if Shrinkflation works." [00:01]
Before diving into the experiment, Phil seeks to understand the concept of shrinkflation—a strategy where companies reduce the size or quantity of a product while maintaining or even increasing its price, thereby boosting profits without overtly raising prices.
Grace Farrell, a consumer expert from WITCH (Consumers' Association), explains:
"Shrinkflation is one of the many ways a company can increase its profit. It involves shrinking the size of the product while keeping the price the same, or sometimes even increasing it." [02:50]
Grace highlights numerous examples, including:
"We've seen it with chocolate chip bars, coffee, toothpaste, butter, and even laundry detergent." [03:54]
Despite widespread application, why do companies persist with shrinkflation despite evident consumer dislike? Grace delves into the psychological phenomenon of change blindness, the inability to detect changes when they are subtle or occur gradually.
"Change blindness is the inability to detect changes, especially when those changes are small and unexpected. Gradual changes often go unnoticed." [06:07]
Referencing the Just Noticeable Difference (JND) concept introduced by researcher Ono in 1967, Grace illustrates how incremental modifications can remain invisible to consumers. The classic, albeit inaccurate, example of a frog in boiling water metaphorically underscores how gradual change can lead to significant, unnoticed outcomes.
Grace further cites the Simons and Levine (1998) study, where 50% of participants failed to notice a person being replaced behind a large painting during a conversation. This emphasizes that without side-by-side comparisons, consumers may remain oblivious to shrinkflation.
Armed with this psychological insight, Phil teams up with Grace to conduct a hands-on experiment on Bolton’s high street. Phil meticulously reduces the size of a Warburton loaf by 5.5%, a typical shrinkflation percentage, and approaches local residents to assess their awareness of the change.
"Over the course of an hour, I spoke to 12 folks from Bolton." [14:10]
Key Observations:
"Only two noticed the bread had been shrunk." [17:51]
This experiment corroborated the psychological theories discussed earlier, demonstrating that subtle, gradual reductions in product size often escape consumer detection, allowing companies to maintain or increase profits without alarming their customer base.
Despite 77% of shoppers in WITCH’s survey acknowledging awareness of shrinkflation, a significant portion remains indifferent, continuing to purchase shrunken products. Grace suggests that without transparent information, consumers are at a disadvantage, inadvertently supporting shrinkflation.
Grace highlights an innovative approach by Carrefour in France, where the supermarket chain proactively labels products that have undergone shrinkflation. By identifying 26 products from major brands like Nestlé and Unilever, Carrefour makes consumers aware of size reductions without restricting their purchasing choices.
"Carrefour's approach is smart because it provides the information consumers need to make informed choices." [18:38]
Proposed Solution:
Grace advocates for legislation mandating grocery stores to label items that have significantly shrunk without corresponding price reductions. This transparency would empower consumers to make educated decisions, potentially curbing the widespread practice of shrinkflation.
Phil concludes by reiterating the subtlety and effectiveness of shrinkflation, linking it to everyday behaviors and broader societal changes. He playfully demonstrates change blindness within the episode by altering his vocal tone subtly—a change he bets most listeners did not notice.
"Did you notice the subtle changes I made throughout this episode? My guess is you didn't." [19:25]
The episode serves as a compelling reminder of how incremental changes, whether in product sizes or corporate policies, can have profound impacts while remaining largely unnoticed by the public.
Final Thought:
Shrinkflation exemplifies how subtle, incremental changes can escape collective awareness, allowing businesses to enhance profitability discreetly. By fostering transparency and leveraging psychological insights, consumers can better navigate and resist these hidden economic shifts.
For more insights and practical advice on behavioral science and business strategies, tune into Nudge Podcast every week with Phil Agnew.