'Feeling guilty': Price hikes a tough sell in Japan despite inflation
The angst faced by Uniqlo and Saizeriya when they attempted to raise prices highlights the struggle Japanese firms face as they battle rising costs in a country that has experienced decades of deflation.
Japanese businesses are grappling with the challenge of raising prices amid rising costs, despite years of deflation. Uniqlo, the global clothing brand, quickly reversed its decision to raise the price of its basic socks following a public backlash. Similarly, Italian-style restaurant chain Saizeriya issued an apology and a 20 yen price increase, regretting its "lack of effort." This public resistance to higher prices highlights the aversion of Japan's long-term consumers to price hikes.
The Bank of Japan recently confirmed its 2% inflation target had been met after 13 years of ultra-loose monetary policy. Inflation began to return in 2022, triggered by global energy shocks from the Ukraine war and Iran's blockade of the Strait of Hormuz. However, Japanese consumers remain reluctant to accept chronic inflation, unlike their counterparts in other Group of Seven economies where wage hikes have kept spending stable.
Smaller businesses, particularly in rural areas, are especially vulnerable to rising costs. Ramen shop owner Sachi, who has resisted a 200-yen price increase, expressed guilt over potentially alienating her loyal customers. Uniqlo's decision to retract its sock price hike reflects the brand's commitment to its affordable image. Despite increased wages in Japan for eight consecutive months, real wages have still not kept pace with rising grocery bills.
Written by urgent.news from Channel News Asia's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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