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Adapting to Less: The Psychological Cost of Rising Food Prices, Shrinkflation, and Skimpflation

Adapting to Less: The Psychological Cost of Rising Food Prices, Shrinkflation, and Skimpflation

Kevin William Grant
March 05, 2024

Dive into how getting less for the same price affects mental health, consumer trust, and challeging decision-making in today's economy.

The Trends

Dr. Sylvain Charlebois’s research highlights the significant adjustments Canadians are making in response to the sharp increase in food prices, driven by changing economic conditions and global challenges. The findings from a survey conducted by the Agri-Foods Analytics Lab at Dalhousie University and Caddle reveal that most Canadians, 64.1%, have altered their grocery shopping habits to cope with the cost increases. An overwhelming 86.4% now describe themselves as more price-conscious than a year ago, adopting various cost-saving strategies such as using coupons, loyalty programs, and shopping at discount stores, with 55.1% employing these mechanisms more frequently. The survey shows a shift towards generic brands, with 63.8% preferring them over national brands as a cost-saving measure. Additionally, 41.2% of Canadians visit grocery stores less frequently, focusing instead on strategic stocking and reducing food waste, which 79.1% have significantly done in the past year.

These changes are also reflected in where Canadians shop, with many turning to discount and dollar stores and 17.0% making online purchases for over a year. Moreover, Canadians are grappling with the need to balance cost and nutrition, with nearly half reducing their meat or protein intake and a significant portion expressing concern over the long-term health impacts of prioritizing cost over nutritional value. The survey also highlights disparities based on region, generation, and income, pointing to varied responses to food price inflation across these groups.

These trends have broader implications for food inflation in Canadian society, noting the economic, health, and lifestyle adjustments individuals and households make. Dr. Charlebois emphasizes the importance of understanding these shifts and calls for reflection on the part of policymakers, industry stakeholders, and individuals on the impact of food inflation on choices, health, and resilience in the face of economic uncertainty. Despite these challenges, she offers a note of optimism, as food inflation is reportedly slowing, and Canada is said to have fared better than many other countries in the past year.

Perceived and Actual Corporate Greed

In the face of rising food prices and allegations of grocer profiteering, Loblaw Companies Ltd. has been actively trying to mitigate damage to its brand by addressing public concerns and countering the narrative of undue profit-taking. Despite reporting a profit growth of over 30%, the company argues that this increase stems from a comparison to a previous year with unique charges. Its retail gross margins on food and drugs have slightly declined due to not entirely passing on double-digit supplier cost increases to consumers. Loblaw's Chief Financial Officer, Richard Dufresne, emphasized that the accusations of profiteering are unfounded, attributing cost increases to higher suppliers' prices and significantly larger global brands.

Experts, however, express skepticism about Loblaw's communications efforts. David Soberman from the University of Toronto and Michael von Massow from the University of Guelph acknowledge Loblaw's difficult position but question the timing and transparency of the company's responses. Soberman criticizes Loblaw for not providing detailed information on the exact nature of cost increases, suggesting that the company's efforts might be an attempt to shift blame to suppliers. Meanwhile, von Massow notes that while Loblaw's efforts to explain its profit figures are credible, they may need to be more timely in the context of ongoing public frustration over high food costs.

The broader discussion reflects a tense climate surrounding food inflation in Canada, with a significant portion of the public blaming grocers for price gouging. Despite this, Loblaw insists it strives to fight inflation and keep customer prices as low as possible. Its food margins have declined, indicating supplier costs are rising faster than retail prices. The conversation also touches on the role of global brands and their influence on pricing, with Soberman suggesting Loblaw is attempting to deflect blame onto these suppliers due to their cost increases.

This debate is against public dissatisfaction with grocery prices and concerns over grocery profits amid inflation. The Competition Bureau's recent study calling for more competition in Canada's grocery sector adds another layer of complexity. While increased competition could benefit consumers, it might also disrupt the economies of scale from which large companies like Loblaw benefit. The article encapsulates the tension between protecting consumer interests, managing supplier costs, and maintaining corporate profitability during economic uncertainty and public scrutiny.

Srinkflation and Skimplation

Shrinkflation, a term that blends "shrink" and "inflation," refers to a strategy where companies reduce the size or quantity of their products while maintaining or slightly increasing prices. This phenomenon is widespread across various sectors, including food, household, and health products, subtly impacting consumers' wallets by offering less value for the same price. Despite its significant effects on purchasing power, shrinkflation remains underreported and lacks systematic oversight or documentation. The challenge in monitoring shrinkflation lies in the vast array of products and the absence of comprehensive databases tracking changes in product sizes and prices over time. This makes it difficult for consumers to notice and respond to these gradual changes, often designed to be subtle enough to escape immediate detection.

Adding to the complexity of consumer experiences is "skimpflation," a related concept where businesses reduce the quality or extent of services provided while keeping charges steady. This could manifest as reduced customer service, fewer features, or diminished product quality. Like shrinkflation, skimpflation is a cost-saving measure for companies facing rising production or operational costs, aiming to preserve profit margins without overt price increases.

Shrinkflation and skimpflation highlight companies' inventive strategies to navigate economic pressures without directly raising prices. However, these practices contribute to consumer frustration and diminished value received, raising calls for greater transparency from manufacturers and service providers. While individual vigilance and consumer advocacy can play roles in combating these trends, there is a broader need for regulatory attention and systematic tracking to understand and address their full impact on consumers.

Shrinkflation is a growing concern among Canadian consumers facing rising costs for essential goods. This phenomenon, subtly executed through minimal packaging changes, often goes unnoticed, leaving consumers feeling deceived and calling for regulatory action. Despite significant public disapproval, evidenced by an Ipsos poll revealing that 64% of Canadian respondents find shrinkflation unacceptable, Canada has yet to implement regulations to address this issue. Meanwhile, countries like Brazil, Hungary, South Korea, and France are taking steps to mandate companies to disclose product size reductions on packaging.

Consumers' frustration is compounded when discovering that products like dish soap and snack chips have reduced in volume without a corresponding decrease in price, leading to calls for greater transparency and accountability from manufacturers. The debate on tackling shrinkflation includes suggestions for legislation mandating clear labeling of product changes, though industry groups warn of potential adverse effects on business costs. Alternatives proposed include in-store color coding systems or a public list of downsized products to inform consumers without directly impacting packaging.

As the Canadian government funds research into harmful retail practices, including shrinkflation, consumers urge immediate action, while others advocate for corporate social responsibility over regulatory measures. This situation highlights a tension between consumer rights and business practices, emphasizing the need for a balanced approach to ensure market transparency and fairness.

Shrinkflation and skimpflation have significant psychological impacts on consumers, affecting their trust, perception of value, and overall satisfaction with brands and retailers. When consumers discover they are receiving less for the same price or that the quality of service has diminished, they may experience feelings of betrayal and frustration (Chandon et al., 2019). This sense of unfairness can lead to decreased brand loyalty and increased skepticism toward companies, potentially influencing consumers' future purchasing decisions (Aaker et al., 2010). Additionally, the constant vigilance required to detect these practices can contribute to decision fatigue, where the mental effort of making informed choices depletes cognitive resources, leading to poorer quality decisions in other areas of life (Vohs et al., 2008). Over time, this erosion of trust and increased cognitive burden can negatively impact consumer well-being, as individuals feel less control over their economic environment and are more susceptible to manipulation by corporations (Kahneman et al., 1991). Moreover, the psychological impact of perceived loss—getting less product or lesser quality—can be more potent than the pleasure of gaining something, further exacerbating consumer dissatisfaction (Tversky & Kahneman, 1991).

The Psychological Impacts

The adaptations Canadians make in response to soaring food prices, such as altering shopping habits, utilizing cost-saving strategies, and prioritizing price over nutritional value, have significant psychological impacts. Initially, these shifts can lead to heightened stress and anxiety levels among individuals and families. The stress stems from the constant challenge of managing budgets while ensuring adequate nutrition. The economic pressures force consumers to frequently seek discounts and deals, requiring continuous decision-making that can lead to cognitive overload. This state occurs when the mental effort needed to manage these financial and nutritional decisions detracts from other areas of life, potentially affecting individuals' overall functioning and well-being (Swartz, 2019).

Prioritizing cost savings over nutritional quality often results in dietary changes that may not meet the individual or familial nutritional needs, leading to feelings of guilt or concern. Individuals might worry about the long-term health implications of their altered diets, particularly for vulnerable family members such as children or elderly relatives. This concern can exacerbate the psychological burden, impacting not only their current mental health but also fostering anxiety about future health outcomes (Smith & Cummins, 2020).

The observed disparities in responses based on region, generation, and income level further complicate the psychological landscape. Those in lower income brackets or younger generations, like Millennials, may face a disproportionate stress burden due to these economic pressures. The struggle to balance food affordability with nutritional value is more acute for these groups, highlighting the unequal distribution of psychological stress and its societal implications. This variability suggests that the psychological impact of food price inflation is not uniform, with some segments of the population experiencing more significant mental health challenges (Jones & Ngure, 2021).

The psychological implications of Canadians' adaptation to rising food prices encompass a range of experiences, from increased stress and cognitive overload to concerns about nutritional adequacy and future health outcomes. These impacts highlight the importance of considering mental health support and interventions as part of the response to economic challenges like food price inflation. Addressing these psychological effects is crucial for supporting the well-being of individuals and communities navigating these difficult times.

Difficult Choices

Canadians' problematic financial choices between food, heat, electricity, healthcare, prescriptions, and other vital life spending profoundly impact mental and physical health. Financial stress and the pressure to allocate limited resources among essential needs can lead to significant mental health challenges, including increased levels of stress, anxiety, and depression. The constant worry about how to stretch a budget to cover necessary expenses contributes to chronic stress, which is known to have detrimental effects on mental well-being. Chronic stress can impair cognitive function, reduce the quality of sleep, and decrease the ability to cope with additional stressors, further exacerbating mental health issues (American Psychological Association, 2020).

Physically, the trade-offs between essential needs can lead to adverse health outcomes. For example, insufficient nutrition due to budget constraints can result in malnutrition or inadequate intake of essential nutrients, compromising the immune system, increasing susceptibility to illness, and leading to long-term health conditions such as heart disease, diabetes, and obesity (World Health Organization, 2020). Similarly, inadequate heating or cooling in extreme weather conditions due to financial constraints can lead to health problems ranging from hypothermia and frostbite in cold weather to heat exhaustion and heatstroke in hot weather. Decisions to forego or delay medical care, prescriptions, or other healthcare needs because of cost concerns can lead to worsening chronic conditions, delayed diagnosis of new health issues, and poorer health outcomes (Pickett & Wilkinson, 2015).

These physical health impacts, in turn, can exacerbate mental health challenges, creating a vicious cycle where poor physical health leads to greater stress and mental health issues, which then further impedes the ability to manage one's health and financial situation effectively. The interplay between financial stress, mental health, and physical health underscores the need for comprehensive approaches to address the root causes of financial insecurity and to provide support systems that can help mitigate these adverse health outcomes.

Interventions and Solutions

Protecting mental health in the face of financial stress and difficult choices about essential spending requires a multifaceted approach that includes individual strategies, community support, and accessing available resources. Based on the challenges highlighted above, here are several ways individuals can protect their mental health and explore available options:

Individual Strategies

  • Mindfulness and Stress Reduction Techniques: Practices such as mindfulness meditation, deep breathing exercises, and yoga can help reduce stress and anxiety levels. These techniques can improve coping with financial stress by promoting relaxation and improving mental clarity.
  • Budgeting and Financial Planning: Budgeting can help alleviate stress by clearly understanding one's financial situation. Free online tools and apps can assist in tracking expenses and identifying areas where adjustments can be made to allocate limited resources better.
  • Healthy Lifestyle Choices: Maintaining a balanced diet, regular physical activity, and adequate sleep can bolster physical health and, by extension, mental well-being. Simple and cost-effective exercises like walking or home-based workouts can be beneficial even when finances are tight.

Community and Social Support

  • Seeking Support from Friends and Family: Sharing concerns with trusted friends or family members can provide emotional support and practical advice. Social connections can offer comfort and reduce feelings of isolation.
  • Community Resources and Programs: Many communities offer food banks, community kitchens, and utility assistance programs to help alleviate the burden of food and energy costs. Engaging with local community centers or charitable organizations can provide access to these supports.

Professional Help and Resources

  • Mental Health Services: Accessing mental health services can be vital. Some employers offer Employee Assistance Programs (EAPs) that provide free access to counseling sessions. Additionally, community health centers often offer mental health services on a sliding scale based on income.
  • Financial Counseling: Professional financial advisors or nonprofit credit counseling services can offer guidance on managing debt, budgeting, and making informed financial decisions. Some services are free of charge and can provide strategies for financial management that reduce stress.
  • Government and Nonprofit Assistance Programs: Healthcare and Prescription Assistance: Government programs and nonprofit organizations may offer assistance with healthcare costs and prescription medications. Researching and applying for these programs can reduce the financial burden of medical expenses.
  • Utility Assistance Programs: Some jurisdictions offer assistance programs to help low-income households with the cost of heating, electricity, and water bills. Investigating these programs can provide relief from utility costs.

Protecting mental health in challenging financial times involves leveraging personal coping strategies, seeking support from one's social network, accessing professional help, and utilizing available community and government resources. By taking proactive steps and seeking out support, individuals can mitigate the mental health impacts of financial stress and the difficult choices it necessitates.


Throughout this discussion, I have explored the multifaceted impacts of soaring food prices on Canadians, highlighting how these economic pressures drive significant changes in shopping habits and lead to difficult financial choices between essential needs such as food, heating, electricity, healthcare, and prescriptions. These shifts have profound implications for both mental and physical health, with increased stress, anxiety, depression, and physical health issues arising from the problematic trade-offs many Canadians are forced to make.

To protect mental health in the face of these challenges, it is crucial to seek support systems, whether through community resources, mental health professionals, or online support networks. Financial planning and budgeting tools can also help manage economic pressures, while mindfulness practices, regular physical activity, and social support mitigate some psychological impacts. Public policies and community programs that address food security, healthcare accessibility, and affordable housing can play a significant role in alleviating the root causes of these stressors.

The economic realities of rising food prices and the consequential shifts in Canadians' lives underscore the intertwined nature of financial stability, mental well-being, and physical health. The discussion emphasizes the importance of holistic approaches to address these challenges, including individual coping strategies, community support systems, and policy interventions. By recognizing the depth of these issues and the broad spectrum of their impacts, we can begin to develop more effective strategies to support those affected and work towards mitigating the long-term consequences on Canadian society.




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