As a downside, it does lead to "crafty consumers" using the unit price as their highest priority criteria for selecting products, and disregarding factors like quality and nutrition. This leads to way too many products in the ultra low price segment, and a hard time for makers of higher quality products.
It's a race to the bottom, and shrinkflation still happens.
That will happen no matter what. If you are poor you pay attention to price of the things you buy more then quality.
I know it from practice, only when you have some financial stability you can educate yourself to pick the best product and not just kg/$.
> This leads to way too many products in the ultra low price segment, and a hard time for makers of higher quality products.
I don't think there is any kind of competition between quality product vs cheap products. Be it food or tools or etc. Both cater to different segment. Its like saying that if ford or fiat slash their prices by half, mercedes will loose some of the customers.
Poorer people don't have much choice but to settle for cheaper options. When you have more money you will not buy processed food etc even though its cheap then quality unprocessed food because its hidden cost of health damage is too high.
Literally nobody shops by trying to buy the cheapest calories per unit. Calories are simply too easy to come by for that to matter. What people do is they make a menu (not necessarily before they go to the store) for the next 1-N meals then they choose brands or products that will accomplish that in the cheapest manner possible. This means they see the numbers and buy house brand butter. Where you get into issues is stuff like eggs where it's kind of hard to tell if the increase in size by buying large outweighs the savings per dozen by buying medium or where substitute products are not sold in easily convertible units and you have to do much more math in your head.
I know at least 2 people who have min/max'd their calories/dollar to peanut butter and rice and beans.