The impact of downsizing Chocolate
The downsizing of chocolate has had a major effect on both the CPI and the RPI
It’s true: according to the Office for National Statistics, (ONT), the downsizing of chocolate has had a major effect on both the Consumer Price Index (CPI) and the Retail Price Index (RPI) as the ‘Big Players’, notably Mars, Mondelez and Nestle, cut pack sizes at around the same time.
Food and Drink prices rose by 0.5% between September and October 2013, and the main culprit was confectionery. The net result was that the RPI rose to 2.7% in October, a 5% hike on the previous month.
That’s because pack size reductions are considered to be exactly the same as price increases, because consumers are getting less for their money. The brands have a pretty good ‘case for the defence’, however. Yes, raw material costs have risen in recent months (and cocoa prices, for example, seem set to rise still higher). However, the most convincing reason is that the big manufacturers, in April 2012, signed up to the government’s ‘Calorie Cap’ scheme, and by so doing, they agreed to help achieve the target of reducing the UK’s intake by (a staggering) 5 billion calories per day.
For many of the protagonists in ‘Calorie Cap’, the response was to cut pack sizes, as we’ve seen. Who failed to notice that the traditional Christmas tin of Quality Street contained just 820g last year, as opposed to the usual 1kilo? (Quality Street is, of course, a Nestle brand). Mondelez also acted: its best selling chocolate bar now has two fewer chunks than before; and the eagle-eyed amongst you might have noticed that the standard Toblerone bar now has one fewer mountain to climb… As for the Mars bar, is that ‘the new milky way’?
From the consumer’s point of view, the problem is obvious. Why are they being charged the same money for a product that is noticeably smaller? Despite the fact that manufacturers tell us it’s the retailers that set the prices, the consumer champion ‘Which?’ directed its considerable criticism at manufacturers door…
So, how has downsizing – price increases by stealth, as it were – affected sales in the vending industry? Watch this space!!