Page 3 - Default Effect News Today

And, kai, what do you think about companies using shrinkflation? you know, keeping prices the same, but making the product smaller? i mean, is that effective? if shrinkflation is effective depends very much on the perceptual threshold. so, for example, in weight, if i compare two weights, i need at least two grams of difference for 100x100 grams to perceive that difference at all. now, over time, that becomes more, so i maybe forget that last week, you know, that carton of milk or that little pi...

Years ago, for example. so, kona, imjust wondering, do we as consumers who, lets be frank, have been used to pretty cheap food for some years, do we have to just now get used to these higher prices? i think the whole 2000s and early 2010s where we used to enjoy really good prices for pretty much everything, we enjoyed low inflation for the longest time — those days are gone. were now going back to the �*70s and �*80s, not skyrocketing. inflation will come down, but were not going to see th...

That can continue to be fraught with risk. and the final thing is the other producing regions, you know, we are seeing some sort of climate change, unfortunately, which does create havoc across the world, particularly tropical countries. so whether its floods or droughts, inevitably youre going to see some of that in some key producing region. and i think that, again, may affect the supply side. so bottom line, unfortunately, i think prices are not likely to get back to levels we saw pre 2019, t...

Was absorbed by the company and 50% was given back to the industry, so to the market. but again, this is up to the fact that we can do it because we are a family company. and antonio, you negotiate with with all the big retailers around the world. im wondering how difficult have those negotiations been, given these surging prices? yeah, you know, i totally understand also their position because if i compare what is happening to retailer in this moment, you know, costs like energy that in the pas...

Perceptual threshold. so for example, in weight, if i compare two weights, i need at least two grams of difference for 100 by 100 grams to perceive that difference at all. now, over time, that becomes more so i maybe forget that last week, you know, that carton of milk or that little piece of tea or so was slightly heavier than this week. so companies understand what the perceptual threshold for the different units is, they have good chances to make shrinkflation successful. kai, are retailers, ...

Of winning minds and winning deals. kai—markus mueller, a real pleasure having you on this show. and kai, lets start with this. what are some of the tips and tricks that retailers use? well, there is a wealth of them in consumer psychology. but ill tell you a few of them. a very, very, very strong component is, for example, the default effect. so, for example, if you have a subscription, it renews by default and we have trouble thinking about the renewal, wejust let it go. then there are thing...

Ok, so lets start with the raw ingredients. take wheat, for example. before the pandemic, about four years ago, a bushel of wheat was trading on the market at $4.70. that spiked when russia invaded ukraine one year ago. the same amount of wheat went up to almost 13 bucks a bushel. but at the end of march this year, it was sitting at around $7, much less than the peak, but still 47% higher than before the pandemic. its a similar story with cooking oil. before the pandemic, a pound of soybean oil ...

So whether its the grains corridor or exports flows, that can continue to be fraught with risk. and the final thing is the other producing regions, you know, we are seeing some sort of climate change, unfortunately, which does create havoc across the world, particularly tropical countries. so whether its floods or droughts, inevitably youre going to see some of that in some key producing region. and i think that, again, may affect the supply side. so bottom line, unfortunately, i think prices ar...

Have the same access to the profit structures of our branded suppliers, but we do challenge them as hard as we possibly can. ok, so lets start with the raw ingredients. take wheat, for example. before the pandemic, about four years ago, a bushel of wheat was trading on the market at $4.70. that spiked when russia invaded ukraine one year ago. the same amount of wheat went up to almost 13 bucks a bushel. but at the end of march this year, it was sitting at around $7, much less than the peak, but ...

I mean, is that effective? shrinkflation is effective. depends very much on the perceptual threshold. so for example, in weight, if i compare two weights, i need at least two grams of difference for 100 by 100 grams to perceive that difference at all. now, over time, that becomes more so i maybe forget that last week, you know, that carton of milk or that little piece of tea or so was slightly heavier than this week. so companies understand what the perceptual threshold for the different units i...