Pittwater Life April 2017 Issue

Business Life: Finance
Business Life
Will we see growth from
new age of shrinkflation?
It’s always interesting to go
back in time and review
notes and views to see how
much things change. Bearing
this in mind I recently re-read
every article I have written for
the readers of Pittwater Life
to make sure we remained
relevant.
Interestingly in the June
2016 edition of Pittwater Life
our ‘Business Life – Finance’
column focused the entire
article on why Donald Trump
was underestimated and
why he would continue his
ascendancy to the top role. I
recall “taking some flack” for
what was at the time seen as
an extreme view of potential
for change.
So, what comes next? Well,
many predicted that the US
Stock Market would fall by 30
per cent or more; but what in
fact has happened post the US
election is that the US Stock
Market has increased in value
by around 3 TRILLION dollars
(cue little finger to side of
mouth, a la Dr Evil) – so the
sky hasn’t fallen in, yet.
Knowing that generally
“investors have a fundamental
misunderstanding of risk”
we need to continue to look
forward and look at the big
maps in order to prepare for
what lies ahead. Which is what,
exactly?
Well, get ready for higher
interest rates, higher inflation
and what we also call
‘Shrinkflation’.
What is Shrinkflation? Well,
Shrinkflation is a rise in the
general price level of goods
per unit weight or size, with
a corresponding reduction
in the weight or size of the
item sold. Hence the price
of the packaged product
remains the same. This does
not affect inflation measures
such as the consumer price
index or Retail Price Index,
because there is no increase
in the cost of a basket of
City is no longer slicker
Continued from page 16
is not productive. Putting that
time back into something constructive,
whether that be a few
extra hours in the office or take
a kid to soccer, is better than
hearing the same traffic report
five times.
“On sunny days we have
sales meetings on the beach –
it doesn’t get any better than
that!”
Sandbox started out in coworking
space in Newport, with
a growing team prompting two
office moves since.
Paul said almost all their
clients’ needs and work can
be done over the phones or by
email – “and we can be in the
city at a moment’s notice (outside
of peak hour obviously) so
proximity to our clients really
doesn’t make a difference”.
Their digital team and search
department work from an
office close to their homes at
Thirroul north of Wollongong.
“We couldn’t be further
apart, it’s just more time on
the phones and emails,” he
said. “We tend to do a lot of our
meetings in one or two days
a week in the city, outside of
peak times.
“We have had a few clients
come up to us – mostly the
media come and visit us, they
actually don’t mind the trip
and tend to make a day of it,
retail goods and services. Go
to your local supermarket,
walk the aisles and count the
amount of products that seem
to be in smaller packaging, or
have less product in the old
packaging.
By way of example you may
have noticed the press of last
year regarding the public
backlash as the size of the
Toblerone bar was reduced,
in quite a tricky way I recall.
In 2016, the size in the United
Kingdom of the 170-gram
Toblerone bar was reduced
to 150g while the 400g bar
was reduced to 360g. This
was done by enlarging the
gap between the chocolate
triangles – the size of the
packaging stayed the same.
and The Newport gets a fair
workout…
“We had one media rep come
down to our offices, had a swim
in Pittwater then did their sales
pitch wrapped in a towel on the
wharf in Newport.”
He said the move had
changed lives.
with Simon Bond
Let us consider a few
other examples from recent
studies released in the United
Kingdom.
The Kit Kat Chunky is less
chunky than it used to be,
after its weight dropped from
48g to 40g. But manufacturer
Nestle claimed this is not all
down to rising production
costs – it said that the change
is also to help customers
lose weight as a part of the
Government’s anti-obesity
campaign. Yeah right.
The Daily Mail in the UK
reported that while Tesco has
reduced pasta sauce cartons
from 375g to 350g, they are
still promoted as serving two
people. Cadbury has also cut
the number of Creme Eggs in
its multipacks from six eggs
to five ahead of Easter. And a
study published by consumer
group ‘Which?’ highlights
other products using the trick.
Richard Lloyd, executive
director of the consumer
group, said: “Shrinking
products can be a sneaky
way of putting up costs for
consumers because pack sizes
shrink but the prices don’t.”
Loaves of Hovis’ Best
of Both bread reduced
“Not having the pressure
of leaving before dawn and
getting home after dark
five days a week and being
able to spend more time
with our young families is
invaluable.
“A lot more people are looking
at what we have established
and are questioning
why they still live/work the
way they do – and why not?
We spend the majority of our
lives working, so it makes
sense to enjoy what you do.”
* Workshop Australia – Level 1,
341 Barrenjoey Rd, Newport.
P: 0419 208 239 wshop.com.
au; Sandbox Media – 15/355
Barrenjoey Rd, Newport.
P: 0412 792 911.
– Nigel Wall
52 APRIL 2017
Celebrating 25 Years