Credit Crunch

Credit Crunch Causes Food to Shrink

Global food inflation has caused many food manufactures to reduce the amount of food contained in their food packages. The food companies are having difficulty negotiating prices with leading supermarkets and are therefore having to compromise by reducing the amount of food sold.

So far in the UK the only company to make this sacrifice is Kraft the producers of Dairylea who have reduced their pack of 8 Dairylea cheeses from 180g to 160g but food analysts believe it is only time before other leading food producers such as Pepsi and Unilever do the same.

In America Unliver have reduced the amount of Hellmann’s mayonnaise sold from 32 ounces to 30 and Kellogg’s have cut down on the amount of cereal in their boxes.

The food manufactures have been slightly crafty with their food reduction because they have not changed the size of the boxes and have only reduced the contents so that people are less likely to notice the change. Market research analysts have commented that consumers are more likely to notice food prices increasing than contents reducing so shoppers need to keep their eyes peeled on the contents of their shopping basket to ensure that they are receiving a good deal.

However a price war is expected by the main supermarkets as they compete to attract shoppers who may be tightening their price strings due to the credit crunch. Some food lines may be cut by half or even reduced to 50p in an intense bid to encourage shoppers to spend. Some of the items included are fruit and veg as well as chocolate. The Office of National Statistics has recently revealed that food inflation had reached an all time high at nine point five per cent.