Shrinkflation across borders: examining Japan’s response and global implications amid rising inflation

Abstract

This study examines the phenomenon of shrinkflation in Japan, focusing on its origins, implications, and role in the broader inflationary context. As a response to rising production costs, shrinkflation enables producers to maintain competitiveness by avoiding direct price increases and limiting consumer backlash. The study high lights Japan's historical experience with deflation and price rigidity, which contrib utes to heightened consumer sensitivity to price changes. While often perceived as unfair by consumers, shrinkflation is preferred to direct price increases, particularly in the food sector, where it can help reduce waste. The research suggests that trans parent communication about price changes builds consumer trust and brand loyalty, making it a more sustainable strategy than shrinkflation. The findings point to the importance of taking cultural and economic conditions into account when analyzing shrinkflation and underscore the need for further research into its effects in different countries and within Japan's Consumer Price Index.