Skimpflation: The New Economic Reality
Skimpflation. It's a word quickly gaining traction as the new reality of the global economy. Skimpflation is when consumers are getting less for their money, and it is happening worldwide. In this blog post, we will explore skimpflation, why it is happening, and what it means for businesses and consumers.
In recent times, have you wondered:
Why is it that there are considerably fewer rides for you to enjoy in Disneyland nowadays?
Why is it taking so long for Dominos to fulfill my order?
Why airlines have been canceled a lot lately.
The reason for all of this is Skimpflation. Skimpflation is a direct consequence of the current global economic climate, one in which businesses are struggling to keep up with rising costs while consumers increasingly price sensitive. What it basically implies is a deterioration in the quality of services as businesses struggle to deal with a labor shortage and increasing material prices.
Let's take a look at this using an example.
Consider you own a restaurant. Costs are increasing, but customers aren't flocking to your establishment as they once did, especially after Covid. You may now shift part of these expenses to customers, however not all of them. What if staff pay increases or the laundromat charges an exorbitant fee to wash your tablecloths? It's tough to charge customers for these expenses. You may either cut the number of waiters to five instead of six or let go of the extra cook. And this affects your customers' experience in a negative way. Customers may have to wait longer for their meals or might struggle to order them in the first place. As a result, by cutting corners on quality, you're essentially providing customers with a substandard experience. This is precisely what skimpflation is. It may manifest in a variety of ways, such as the aviation company known for offering meals throughout the flight ceasing operations, or hotels slashing cleaning services or reducing their breakfast buffet options. Whatever the case, it is resulting in a large number of unhappy customers.
Furthermore, skimpflation is almost impossible to track in the official figures. How are you going to measure customer service quality? It isn't that simple.
Skimpflation is a real and pressing issue that businesses and consumers are facing all over the world. It manifests in different ways, but almost always results in an inferior customer experience. Unfortunately, it is difficult to track and measure skimpflation officially. This makes it tough for both businesses and customers to be aware of what's happening. However, with a little bit of research, it is possible to get an idea of how skimpflation is affecting businesses and consumers in your country. Skimpflation is a new economic reality that we all must learn to deal with.
Have you experienced skimpflation? How has it affected you? Let us know in the comments below. Thanks for reading.