I unwrapped my favourite chocolate bar, ready to enjoy the familiar taste, when something felt… off.
I looked down.
Had I imagined it? No — this bar was definitely smaller than before.
The packaging was the same, the price hadn’t changed, but there was less chocolate. The manufacturer had quietly reduced the size.
In reality, this was a price hike in disguise. I was paying the same amount for less product —just without the shock of an obvious increase.
You can probably guess which chocolate bar I’m talking about… And perhaps you’ve noticed it happening with other products too.
It’s called “shrinkflation.” And while it can be frustrating as a consumer, it’s also an important lesson for business owners like you.
Over the past couple of weeks, I’ve been discussing the importance of adjusting your prices to protect your margins in this inflationary environment. But raising prices outright isn’t the only way to do this.
Sometimes, the smarter move is to adjust what you’re offering by reducing the scope — just like in my chocolate bar example.
Another option is to improve efficiency, cutting costs without increasing prices.
For example, you might have a specific team member assigned to a client account. Over time, their experience grows, and so does their salary — making it more expensive to service that client.
It might make more sense to assign a more junior staff member to that account, freeing up your senior employee for higher-value work.
There’s no one-size-fits-all approach. Should you raise prices? Reduce what you offer? Become more efficient?
The only way to decide is by understanding your numbers — your costs, margins and market position — so you can make a data-driven decision, not a knee-jerk reaction.
That’s exactly where we help our clients, when we work together to manage your finances. Pricing strategy is part of our broader focus on making your business more profitable and helping you grow faster.
If you’d like to explore the best pricing approach for your business, call us on 01279 647 447 or just email garry@insightassociates.co.uk to book a no-obligation consultation with myself or one of our specialists.
Warmly,
Garry
You might also like: Pricing is not a maths problem. It’s a judgement problem – Insight Associates Limited
