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The Meaning of ‘Upflation’

Jul 9, 2024

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Hello, and welcome to English for Economists, the only podcast that helps you understand the day-to-day words and expressions that people use to discuss the economy in English. Don’t worry, you actually don’t need to be an economist to listen to these podcasts or to enroll in my conversation classes; this lesson and all my lessons are non-technical. I will help you out with the everyday language that is useful for anybody who needs to read or discuss economic issues in English. Stay tuned for episode 93.

Some of you regular listeners might remember the podcast I published in April where I taught the words ‘shrinkflation’ and ‘skimpflation.’ Just in case you missed it, here is a quick review. Listeners learned that ‘shrinkflation’ refers to the practice of some companies making their products smaller while charging the same price. They also learned that ‘skimpflation’ involves keeping products at the same price but using cheaper, lower-quality ingredients. These are two practices producers use to maintain their profit margins in the face of rising production costs without raising the price, which could deter customers.

Now, let’s introduce a new term that is becoming increasingly relevant: ‘upflation’. According to a recent headline from Bloomberg, ‘Upflation’ Is the New Retail Trend Driving Up Prices for US Consumers. The article explains that big consumer products companies have kept their revenue up in recent years via the practice of “shrinkflation” — raising prices while reducing the size of packages. But consumers will only tolerate that for so long before they start seeking alternatives or trading down to cheaper options. That’s resulting in “shrinkflation” being replaced by “upflation,” an attempt to create new uses for products and then charging more for them.

To help illustrate ‘upflation’, consider the trend of gourmet versions of everyday foods. Standard food items like peanut butter or chocolate are rebranded as gourmet products with added ingredients, such as organic or ethically sourced components, and sold at a premium price. Another example can be found in the world of smartphones with incremental features. New models are released with small improvements, such as slightly better cameras or additional software features. These new functionalities are marketed as essential, and the price is raised significantly compared to previous models.

In conclusion, ‘upflation’ is a strategy used by producers to innovate new uses for their products and then charge more for them. This approach aims to sustain profitability in a market where traditional tactics like ‘shrinkflation’ are no longer effective.

Thanks everyone for the interest in my conversation classes. For now, I am all booked up, but I will let you know as soon as new schedule alternatives become available.

Take care, and keep practicing. This is Alan Robert. Goodbye for now.

 

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