Cadbury's Smaller-Size, Same-Price Announcement Won’t Fly With Consumers’ Budgets, Says GlobalData
Tuesday, July 21st, 2020 | 249 Views
Cadbury has announced plans to reduce size of its chocolate bars sold in multipacks to reduce calorie counts by 2021, however, prices will remain the same.
Following this news, Yamina Tsalamlal, Consumer Analyst at GlobalData offers her view:
“Following ‘Watergate’, and ‘Deflate-Gate’ comes the latest in the series of ‘-gate’ scandals with ‘Shrinkflation-Gate’. It might seem like a small change from Cadbury’s perspective, but consumers are savvier and can see right through these goodwill gestures.
Reducing the pack size as a way to ‘reduce calories’ without giving any other added value is misguided because consumers are more price conscious than ever. COVID-19 has made shoppers more concerned about their financial situation, with 65 percent of consumers globally saying they are extremely or quite concerned about their personal financial situation, and 23 percent saying they will be opting for lower-price chocolate and confectioneries. If Cadbury’s isn’t careful, it might go the way of Toblerone in 2016, which had to reverse reduction changes made to the bar two years later.
Budgets will be driving a lot of consumers’ decisions at the moment and they will be looking for ‘affordable luxury’. Shrinkflation is not a new concept for the chocolate industry, but it is all about positioning. It is important that Cadbury’s respects this and repositions the product in a way that makes consumers believe they are not bearing the brunt of the costs – especially during a time of economic uncertainty.”
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