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Three ways companies change their products to hide inflation

How to spot the changes made to goods and services as a result of rising costs.

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Shopping during an inflationary uptick can require a bit more thought. Sergey Ryzhov / Shutterstock

Consumer price inflation in the UK slowed for the first time in nearly a year in August. A fall in petrol prices helped slow the overall rate but food prices continue to rise rapidly. But even with a slowdown to 9.9%, from 10.1% in July, inflation still remains close to the highest its been for a generation.

After inflation hit double digit rates earlier this year for the first time since the 1970s, many looked back to compare what’s happening now with what happened then. But this comparison is problematic because it’s not just hairstyles and fashions that have changed over the past 50 years.

Consumer habits are also very different and that means inflation will have a different effect on how people spend and save, not to mention the products they buy, this time around.

For starters, markets are very different today compared with the 1970s. The internet and globalised supply chains have encouraged competition from multiple sources, with people no longer limited to the goods and services that are available locally. Economies are also increasingly based on services, rather than goods, while definitions of essential versus discretionary spending have changed.

Another major change is the deregulation of many state-provided monopoly services since the 1970s. Regardless of whether or not you think this has benefited society, it enables greater price competition.

For example, instead of a monopoly parcel service – the Post Office – passing on increased costs knowing that customers have little alternative, competition between providers such as Parcelforce, Hermes and DPD, among others, can help to keep prices low.

But there are certain product changes that businesses can and do make to try to quietly fold increased costs into prices. Here are three to look out for:

1. Value products

Unsurprisingly, sales of retailers’ “own label” groceries tend to rise when disposable income falls. In line with this, shops and supermarkets have responded to recent inflation by promoting “basic” or “essentials” ranges at low price points. This also happened in the 1970s.

Own label groceries are generally more profitable to retailers than selling manufacturers’ branded products anyway. But the very low price point leaves little profit margin and so supermarkets face a dilemma in that promoting budget ranges could cannibalise sales of higher margin products.

On the other hand, promoting individual products with low prices helps retailers give off a perception of affordability and good value. Among the UK grocery retailers, budget discounters gained ground during the financial crisis of 2007-8.

As inflation has soared more recently, Aldi and Lidl gained a combined 1.8% of UK grocery sales in the 12 weeks to August 7, 2022, representing a £2.3bn annual shift in spending. Aldi has also recently overtaken Morrisons to become Britain’s fourth largest supermarket.

Retailers’ keenness to come across as consumer champions fighting inflation has also been seen recently during what are normally routine supply negotiations. In July, a dispute over a price increase for products including tins of baked beans saw supermarket Tesco freeze its orders from food company Heinz.

The prospect of a Heinz-shaped space on the shelves of one of the UK’s major supermarkets quickly hit the headlines and the resulting publicity was arguably a win-win outcome for both: Tesco was seen to be fighting for the consumer, while Heinz emphasised its premium product values.

2. ‘Shrinkflation’

During times of inflationary cost pressures, a common strategy for manufacturers of fast moving consumer goods such as packaged foods, beverages and cosmetics, has been to hold the price of a product, but shrink its contents.

Often called “shrinkflation”, this quiet process can then be reversed when input costs fall again. That’s when the manufacturer will loudly promote a new, bigger product with a percentage “extra free”.

Although this strategy can work even when consumers’ knowledge of prices is high by moving in small increments, this is another area in which times have changed since the 1970s. Consumers’ knowledge of prices has fallen since the 1970s.

Reference prices (which allow comparisons of different products on a cost per amount basis) are now less readily visible partly because bar coding has replaced individual labels that continue to remind consumers of price after purchase, every time a product is used.

The rise of online shopping has empowered consumers to make their own comparisons, however. A simple web search can easily expose shrinkflation by allowing immediate comparisons of price per unit of weight/volume.

Shrinkflation in action. Cristian Storto / Shutterstock

3. Do it yourself

It is too simplistic to say that firms make things and consumers consume them. In fact, many of the products that we consume result from the combined efforts of producer and consumer.

Inflationary pressures can lead to consumers substituting their own inputs for manufacturers’ own expensive inputs even more. Flat-pack furniture, for example, has reduced cost pressures on manufacturers and enabled consumers to make savings by undertaking parts of the production process themselves.

This trend towards “co-production” is even more marked in services that are actually more dominant in national economies today than in the 1970s, for example banking, much of which has moved from branches to online. Self-service, whether willingly or not, is another way that the effects of inflation can be mitigated.

Permanent change?

Long-term changes in consumer behaviour are more likely to emerge as a result of multiple factors rather than one single issue. And so the consequences of inflation this time around will be different because of other factors, especially climate change, the effects of the pandemic and Brexit.

One intriguing question is whether we will move towards a mainstream culture that is less focused on consumption. Societies have always had subcultures that espouse minimalist consumption values, but there has been an emerging trend for people to reassess their life choices and priorities in recent years.

Soaring inflation, climate change (and climate shame) and the skills gained during lockdown could provide another push to shift such fringe attitudes into the mainstream.

Adrian Palmer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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FDA advisory committee votes unanimously in favor of a one-shot COVID-19 vaccine approach – 5 questions answered

Many questions remain about next steps for US vaccine policy. But the FDA advisory panel’s hearty endorsement of a single-composition COVID-19 vaccine…

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The FDA advisory committee discussed vaccine safety, effectiveness of the current shots, potential seasonality of COVID-19 and more. wildpixel/iStock via Getty Images Plus

The U.S. Food and Drug Administration’s key science advisory panel, the Vaccines and Related Biological Products Advisory Committee, met on Jan. 26, 2023, to chart a path forward for COVID-19 vaccine policy. During the all-day meeting, the 21-member committee discussed an array of weighty issues including the efficacy of existing vaccines, the composition of future vaccine strains and the need to match them to the circulating variants of SARS-CoV-2, the possibility of moving to an annual-shot model, the potential seasonality of the virus and much more.

But the key question at hand, and the only formal question that was voted on, following a proposal from the FDA earlier in the week, had to do with how to simplify the path to getting people vaccinated.

The Conversation asked immunologist Matthew Woodruff, who has been on the front lines of studying immune responses to COVID-19 since the early days of the pandemic, to walk us through the big questions of the day and what they mean for future COVID-19 vaccine strategies.

What exactly did the advisory committee vote on?

The question put before the committee for a vote was whether to move to one COVID-19 vaccine consisting of a single composition for all people – whether currently vaccinated or not – and away from the current model that includes one formulation given as a primary series and a separate formulation administered as a booster. Importantly, approved formulations could come from any number of vaccine manufacturers, not just those that have currently authorized vaccines.

The U.S. Centers for Disease Control and Prevention currently requires that the primary series of shots, or the first two doses of the vaccine that a patient receives, consist of the first generation of vaccine against the original strain of SARS-CoV-2, known as the “Wuhan” strain of the virus. These shots are given weeks apart, followed months later by a booster shot that was updated in August 2022 to contain a bivalent formulation of vaccine that targets both the original viral strain and newer subvariants of omicron.

The committee’s endorsement simplifies those recommendations. In a 21-to-0 vote, the advisory board recommended fully replacing, or “harmonizing,” the original formulation of the vaccine with a single shot that would consist of – at least for now – the current bivalent vaccine.

In doing so, it has signaled its belief that these new second-generation vaccines are an upgrade over their predecessors in protecting from infection and severe illness at this point in the pandemic.

If the FDA panel’s recommendation is endorsed by the CDC, only a single composition of vaccine – in this case, the updated bivalent shot – will be used for both vaccinated and unvaccinated people.

Will the single shot remain a mixed-strain, or bivalent, vaccine?

For now, the single shot will be bivalent. But this may not always be the case.

There was a general agreement that the current bivalent shot is preferable to the original vaccine targeted at the Wuhan strain of the virus by itself. But committee members debated whether that original Wuhan vaccine strain should continue to be a part of updated vaccine formulations.

There is no current data comparing a monovalent, or single-strain, vaccine that targets omicron and its subvariants against the current bivalent shot. As a result, it’s unclear how a monovalent shot against recent omicron subvariants would perform in comparison to the bivalent version.

What is immune imprinting, and how does it apply here?

A main reason for the debate over monovalent versus bivalent – or, for that matter, trivalent or tetravalent – vaccines is a lack of understanding around how best to sharpen an immune response to a slightly altered threat. This has long been a debate surrounding annual influenza vaccination strategies, where studies have shown that the immune “memory” that forms in response to a prior vaccine can actively repress a robust immune response to the next.

This phenomenon of immune imprinting, originally coined in 1960 as “original antigenic sin,” has been a topic of debate both within the advisory committee and within the broader immunological community.

Although innovative strategies are being developed to overcome potential problems with routinely updated vaccines, they are not yet ready to be tested in humans. In the meantime, it is unclear how bivalent versus monovalent vaccine choices might alter this phenomenon, and it is very clear that more study is needed.

Is the committee considering only mRNA vaccines?

While a significant portion of the discussion focused on the mRNA vaccine platform used by both Pfizer and Moderna, several committee members emphasized the need for new technologies that could provide broader immunological protection. Dr. Pamela McInnes, a now-retired longtime deputy director of the National Center for Advancing Translational Sciences, highlighted this point, saying, “I would make a plea for ongoing research on broader protection, maybe different platforms, maybe a different approach.”

A good deal of attention was also directed toward Novavax, a protein-based formulation that relies on a more traditional approach to vaccination than the mRNA-based vaccines. Although the Novavax vaccine has been authorized by the FDA for use since July 2022, it has received much less national attention – largely because of its latecomer status. Nonetheless, Novavax has boasted efficacy rates on par with its mRNA cousins, with good safety profiles and less demanding long-term storage requirements than the mRNA shots.

By simplifying the vaccine schedule to include only a single vaccine formulation, the committee reasoned, it might be easier for competing vaccination platforms to break into the market. In other words, newer vaccine contenders would not have to rely on patients’ having already received their primary series before using their products. Companies seemed ready to take advantage of that future flexibility, with researchers from Pfizer, Moderna and Novavax all revealing their companies’ exploration of a hybrid COVID-19 and flu shot at various stages of clinical trials and testing.

Would the single shot resemble flu vaccine development?

Not necessarily. Currently, the influenza vaccine is decided by committee through the World Health Organization. Because of its seasonal nature, the strains to be included in each season’s flu vaccine strain for the Southern and Northern hemispheres, with their opposing winters, are selected independently. The Northern Hemisphere’s selection is made in February for the following winter based on a vast network of flu monitoring stations around the globe.

Although there was broad consensus among panelists that the shots against SARS-CoV-2 should be updated regularly to more closely match the most current circulating viral strain, there was less agreement on how frequent that would be.

For instance, rapidly mutating strains of the virus in both summer and winter surges might necessitate two updated shots a year instead of just one. As Dr. Eric Rubin, an infectious disease expert from the Harvard T.H. Chan School of Public Health, noted, “It’s hard to say that it’s going to be annual at this point.”

Matthew Woodruff receives funding from the National Institute of Health and the US Department of Defense to support his academic research.

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Measles virus ‘cooperates’ with itself to cause fatal encephalitis

Fukuoka, Japan—Researchers in Japan have uncovered the mechanism for how the measles virus can cause subacute sclerosing panencephalitis, or SSPE, a…

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Fukuoka, Japan—Researchers in Japan have uncovered the mechanism for how the measles virus can cause subacute sclerosing panencephalitis, or SSPE, a rare but fatal neurological disorder that can occur several years after a measles infection.

Credit: Kyushu University/Hidetaka Harada/Yuta Shirogane

Fukuoka, Japan—Researchers in Japan have uncovered the mechanism for how the measles virus can cause subacute sclerosing panencephalitis, or SSPE, a rare but fatal neurological disorder that can occur several years after a measles infection.

Although the normal form of the measles virus cannot infect the nervous system, the team found that viruses that persist in the body can develop mutations in a key protein that controls how they infect cells. The mutated proteins can interact with its normal form, making it capable of infecting the brain. Their findings were reported in the journal Science Advances.

If you are of a certain age, you may have gotten the measles as a child. Many born after the 1970s have never gotten it thanks to vaccines. The condition is caused by the virus of the same name, which is one of the most contagious pathogens to this day. The World Health Organization estimates that nearly nine million people worldwide were infected with measles in 2021, with the number of deaths reaching 128,000.

“Despite its availability, the recent COVID-19 pandemic has set back vaccinations, especially in the Global South,” explains Yuta Shirogane, Assistant Professor at Kyushu University’s Faculty of Medical Sciences. “SSPE is a rare but fatal condition caused by the measles virus. However, the normal measles virus does not have the ability to propagate in the brain, and thus it is unclear how it causes encephalitis.”

A virus infects cells through a series of proteins that protrude from its surface. Usually, one protein will first facilitate the virus to attach to a cell’s surface, then another surface protein will cause a reaction that lets the virus into the cell, leading to an infection. Therefore, what a virus can or cannot infect can depend heavily on the type of cell.

“Usually, the measles virus only infects your immune and epithelial cells, causing the fever and rash,” continues Shirogane. “Therefore, in patients with SSPE, the measles virus must have remained in their body and mutated, then gained the ability to infect nerve cells. RNA viruses like measles mutate and evolve at very high rates, but the mechanism of how it evolved to infect neurons has been a mystery.”

The key player in allowing the measles virus to infect a cell is a protein called fusion protein, or F protein. In the team’s previous studies, they showed that certain mutations in the F protein puts it in a ‘hyperfusongenic’ state, allowing it to fuse onto neural synapses and infect the brain.

In their latest study, the team analyzed the genome of the measles virus from SSPE patients and found that various mutations had accumulated in their F protein. Interestingly, certain mutations would increase infection activity while others actually decreased it.

“This was surprising to see, but we found an explanation. When the virus infects a neuron, it infects it through ‘en bloc transmission,’ where multiple copies of the viral genome enter the cell,” continues Shirogane. “In this case, the genome encoding the mutant F protein is transmitted simultaneously with the genome of the normal F protein, and both proteins are likely to coexist in the infected cell.”

Based on this hypothesis, the team analyzed the fusion activity of mutant F proteins when normal F proteins were present. Their results showed that fusion activity of a mutant F protein is suppressed due to interference from the normal F proteins, but that interference is overcome by the accumulation of mutations in the F protein.

In another case, the team found that a different set of mutations in the F protein results in a completely opposite result: a reduction in fusion activity. However, to their surprise, this mutation can actually cooperate with normal F proteins to increase fusion activity. Thus, even mutant F proteins that appear to be unable to infect neurons can still infect the brain.

“It is almost counter to the ‘survival of the fittest’ model for viral propagation. In fact, this phenomenon where mutations interfere and/or cooperate with each other is called ‘Sociovirology.’ It’s still a new concept, but viruses have been observed to interact with each other like a group. It’s an exciting prospect” explains Shirogane.

The team hopes that their results will help develop therapeutics for SSPE, as well as elucidate the evolutionary mechanisms common to viruses that have similar infection mechanisms to measles such as novel coronaviruses and herpesviruses.

“There are many mysteries in the mechanisms by which viruses cause diseases. Since I was a medical student, I was interested in how the measles virus caused SSPE. I am happy that we were able to elucidate the mechanism of this disease,” concludes Shirogane.

###

For more information about this research, see “Collective fusion activity determines neurotropism of an en bloc transmitted enveloped virus” Yuta Shirogane, Hidetaka Harada, Yuichi Hirai, Ryuichi Takemoto, Tateki Suzuki, Takao Hashiguchi, Yusuke Yanagi, https://doi.org/10.1126/sciadv.adf3731

About Kyushu University
Kyushu University is one of Japan’s leading research-oriented institutes of higher education since its founding in 1911. Home to around 19,000 students and 8,000 faculty and staff, Kyushu U’s world-class research centers cover a wide range of study areas and research fields, from the humanities and arts to engineering and medical sciences. Its multiple campuses—including the largest in Japan—are located around Fukuoka City, a coastal metropolis on the southwestern Japanese island of Kyushu that is frequently ranked among the world’s most livable cities and historically known as a gateway to Asia.


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Beloved Royal Caribbean Adult Event Still Missing; Another Returns

The cruise line has almost fully returned to normal after the covid pandemic, but one very popular activity hasn’t been brought back.

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The cruise line has almost fully returned to normal after the covid pandemic, but one very popular activity hasn't been brought back.

In the early days of Royal Caribbean Group's (RCL) - Get Free Report return from its 15-month covid pandemic shutdown, cruising looked a lot different. Ships sailed with limited capacities, masks were required in most indoor areas, and social distancing was a thing.

Keeping people six feet apart made certain aspects of taking a cruise impossible. Some were made easier by the lower passenger counts. For example, all Royal Caribbean Windjammer buffets required reservations to keep the crowds down, but in practice that system was generally not needed because capacities were never reached.

Dance parties and nightclub-style events had to be held on the pool decks or in larger spaces, and shows in the big theaters left open seats between parties traveling together. In most cases, accommodations were made and events more or less happened in a sort of normal fashion.

A few very popular events were not possible, however, in an environment where keeping six feet between passengers was a goal. Two of those events -- the first night balloon drop and the adult "Crazy Quest" game show -- simply did not work with social-distancing requirements.

One of those popular events has now made its comeback while the second appears to still be missing (aside from a few one-off appearances).

TheStreet

Crazy Quest Is Still Mostly Missing

In late November, Royal Caribbean's adult scavenger hunt, "The Quest," (sometimes known as "Crazy Quest") began appearing on select sailings. And at the time it appeared like it was coming back across the fleet: A number of people posted about the return of the interactive adult game show in an unofficial Royal Caribbean Facebook group.

It first appeared during a Wonder of the Seas transatlantic sailing.

Since, then it's appearances continue to be spotty and it has not returned on a fleetwide basis. This might not be due to any covid-related issues directly, but covid may play a role.

On some ships, Studio B, which hosts "The Quest," has been used for show rehearsals. That has been more of an issue with the trouble Royal Caribbean has had in getting new crew members onboard. And while that staffing issue has been improving, some shows may not have had full complements of performers, so using the space for rehearsal has been a continuing need.

In addition, while covid rules have gone away, covid has not, and ill cast members may force the need for more rehearsals.

Royal Caribbean has not publicly commented on when (or whether) "The Quest" will make a full comeback

Royal Caribbean Balloon Drops Are Back   

Before the pandemic, Royal Caribbean kicked off many of its cruises with a balloon drop on the Royal Promenade. That went away because it forced people to cluster as music was performed and, at midnight, balloons fell from the ceiling.

Now, the cruise line has brought back the balloon drop, albeit with a twist. The drop itself is appearing on activity schedules for upcoming Royal Caribbean cruises. Immediately after it, however, the cruise line has added something new: "The Big Recycle Balloon Pickup."

Most of the dropped balloons get popped during the drop. Previously, crewmembers picked up the used balloons. Now, the cruise line has made it a "fun" passenger activity.

"Get environmentally friendly as you help us gather our 100% biodegradable balloons in recycle baskets," the cruise line shared in its app. 

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