‘Upflation’: Consumer Goods Companies’ New Sales Strategy

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Thanks to the continuously rising cost of living, Americans are becoming increasingly price-conscious in their shopping decisions. Now companies have a new strategy to attract shoppers again, and it’s buzzword-worthy too: Bloomberg calls it “upflation.”

What Is Upflation?

Remember “shrinkflation,” when companies kept prices stable while package sizes shrank? Upflation is essentially the opposite of that. Rather than including fewer items per package, some consumer goods companies are now cramming more into familiar packaging.

For example, Procter & Gamble (PG) has launched a flurry of new products that are basically old products with a twist: There’s Secret deodorant, but for your whole body; and Head & Shoulders dandruff shampoo, but with fewer ingredients, for example.

They have one other thing in common: a premium price tag. The whole-body deodorant retails for roughly twice the price of a single stick. The strategy of upflation is to make minor tweaks to everyday staples, in the hopes of convincing consumers to pay a much higher cost.

America’s Price-Conscious Consumers

The success of upflated products hinges on whether or not consumers actually find them to serve a need. Shoppers may push back on the steep price tags of these premium products or simply don’t buy into the hype around them.

Upflation also serves as a reminder that consumers are increasingly picky with how they spend their money, choosing premium offers for things they really want (something we have observed in airline tickets for example), but downshifting to store brands for essentials.

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