Shrinkflation, skimpflation and Easter Eggs.
SBS News discusses how the cost of producing a chocolate egg has increased, leading to higher Easter Egg prices or smaller product sizes. Variable costs of producing a chocolate egg have increased and in response firm’s have either increased the sale price of their egg or reduced the size (shrinkflation).
ACARA Alignment: ACHEK050
Clip Length: 0:54 minutes
Year: 2025
URL: https://youtube.com/shorts/7GKdhnK3nMc?si=OEC-a40MRxQWUXAi
Economics Concepts: Shrinkflation, skimpflation, variable costs of production
- Show the clip
- Now discuss with students:
- What are some of the costs of producing easter eggs the SBS clip identifies?
- How has cocoa supply changed?
- How has this impacted the price of easter eggs?
- Discuss with students that variable costs change with production, maintaining the cocoa quantity in the easter eggs = higher cost.
- Now draw the variable costs of production curves as illustrated below. Note that the easter egg production costs were at point X in 2024, in 2025 they shifted to point Y with the increased costs as discussed in the SBS news clip.
- Use Lesson Plan 3 from When Less Costs More: Understanding Shrinkflation and Skimpflation Through Viral Videos by Wayne Geerling, G. Dirk Mateer, Nicola Thomas, Nathan Velte :: SSRN this includes bringing 4 snap lock bags of chips with varying quantities to class. Ask students to guess which has more in the bag and then performatively tip them into bowls. Students can inspect (& then eat!). They should be able to see the contents gets smaller.
- Now play students this clip https://drive.google.com/file/d/1JyWz2Uy4UU5qtQhmBtjlyFRFMyA_7Fie/view?usp=drive_link (< 2minutes) to show how shrinkflation works over time.
If the production costs have gone up and the firm doesn’t want to charge the customer more, they can just reduce the amount of the product they put in the packet. This is also known at Shrinkflation. - For an assessment or learning activity get students to find two products that have increased their prices, changed their packaging, reduced the volume of their product or changed the contents used to produce the product. Students should:
1. Include an image of the product
2. Identify the change that has occurred (ingredients, packaging, volume or price)
3. Identify the economic factors that have influenced this (shortage, inflation, increased demand)