It’s just another trick that manufacturers use to get more wallet share from their customers.
Today’s post is by Ron Southard, CEO at SafeSourcing Inc.
In aJuly 1st 2024 Bloomberg article titled “Upflation” Is the New Retail Trend Driving Up Prices for US Consumers” By Leslie Patton and Deena Shanker they discuss how Procter & Gamble is charging $14 for all-over body deodorant — double the cost of a standard stick. Gillette sells a $15 intimate razor specifically for “tricky areas” for $5 more than the regular Venus. And Carefree’s newest pads are meant to catch all sorts of leaks. Those cost more than the old version, too. The article goes on to discuss how a spate of new uses for old products is a somewhat awkward attempt by some of the world’s biggest packaged goods-makers, including P&G, Unilever Plc and Edgewell Personal Care Co. to claw back sales in the US’s more than $100 billion personal care and beauty market.
While this may be a new naming convention, most manufacturers have used tactics like just noticeable difference or JND to try and get more out of consumers for years. Have you ever heard someone say, “the candy bars were much bigger when I was little” That’s because they were. However, over time the size of many items has shrunk while the price has gone up. We may not have noticed it at the time because of the slight change to the product but over the long haul and with the next generation of buyers not having noticed the change, prices went up while the sizes went down. It certainly makes me feel like a cheapskate during Halloween. And with the sizes going down, that means less to spend on ingredients, packaging, shipping, and related costs. While this may cost the consumer more, margins improve at the retail and manufacturer level.
The statement Consumer Beware comes to mind here.
If you’d like to actually reduce your costs and share it with strapped consumers while still improving your profit, please contact SafeSourcing and ask us how to improve gross margin and net profit in the current reporting period.
