Amid inflation, businesses are cutting services and quality. It’s called skimpflation, and you may not even notice it’s happening.
Products on shelves are getting quantifiably smaller, yet you’re paying the same price: a practice known as ‘shrinkflation’. But in addition to shrinking products, businesses are also cutting back on the quality and availability of their services, while keeping prices steady. This is called ‘skimpflation’ – and although the changes are sometimes significant, they often fly under the radar.
“Skimpflation is defined as businesses ‘skimping’ on the quality of a product or service,” says Scott A Wolla, economic education officer at the Federal Reserve Bank of St Louis. As raw prices go up with inflation, businesses skimp by spending less on services or materials to stay profitable – cuts that get passed down to the customer, even as prices remain stable.
In 2021, consumers called out Disney for reducing its offerings for the same ticket prices. During the Covid-19 recovery process, the company failed to restart its tram services to and from parking lots, which forced visitors to walk nearly a mile to enter and exit the parks. After receiving tremendous backlash from angry visitors, Disney slowly began to reintroduce the service.
Read more at BBC.com
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