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Why do supermarket packet sizes keep getting smaller?

In a nutshell shrinkflation. As the cost to produce the item increases, the packa...

14 April 2021

Martin Cozens

In a nutshell shrinkflation. As the cost to produce the item increases, the package size might decrease to keep the price relatively low.

Because of shrinkflation if you want to buy the same goods or services as before you will have to spend more money, meaning you are getting less for each pound. This shows why shrinkflation is a form of inflation. One way of countering inflation is by putting your money into something that will increase in monetary value over time. Gold has long been considered an excellent choice because it holds value and you can spend it as money.

Imagine if a packet of crisps is 50% smaller. To get the same amount you would have to spend £2 instead of one. Another way to see this is the pound buying you half as much. However, if you spent the gold you had bought for £1 you would now be able to get £2 worth of crisps because the gold had also increased in value to £2 – and you can now spend that gold as money.

Also – If you are saving and spending in gold you are giving yourself maximum liquidity and not incurring any costs by moving between currencies or assets.

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