Japan Food Prices: Updated Oct. 15, 2023

 Article Source: https://mainichi.jp/english/articles/20230630/p2g/00m/0bu/042000c

Article:

TOKYO (Kyodo) -- Price hikes have been decided for over 29,000 food and beverage items in Japan for 2023 so far, with the total number expected to be higher than the previous year at around 35,000, impacting households as they continue to face the adverse effects of inflation, a credit research company said.

As an increasing number of stores transfer higher raw material costs to consumers, the number of items subject to price hikes is forecast to be 29,106 by October, exceeding last year's total of 25,768, a survey by Teikoku Databank Ltd. released Friday said.

Ideas:
For many years Japanese companies were very reluctant to increases as maybe they feared the loss of sales if they increased prices and or the economy, overall, was in a depressed, or stagnant phase ,and not growing very much.

But recently has companies have had their profit margin eroding, decreasing, since the pandemic, they now have no choice but to begin to pass-on their costs to the next in the supply chain, including the final consumer.

As prices of retail good increase consumers now to decide what they need and or don't need and make substitute choices of what they need or want is now too much.

But there are positives and negatives in any market economy. If the wage increase and price increase are equal or close too it, it might get Japan out of its de-flation phase and begin to see some real significant economic growth in future.

Article:

The company said the rate that prices have been increasing this year is unusual.

If the approximately 35,000 items forecast to see price hikes this year do so, aided by a bump in Japanese sake and wine prices in October, the company said.

July will see prices for more than 3,500 items rise, with bread products being the largest proportion at 1,578 items. The rising cost of bread products reflects price increases for raw ingredients such as imported flour and dairy, as well as electricity and gas.

Ideas:

If bread prices, as with any products stats to get too high, then consumers of course might try to find substitutes if they can and or not buy as much or not buy at all. 

Of course every consumer is different and has different tastes and likes and they might choose or not choose to buy certain products.

Again many companies in the past, probably just keep the raw material costs increases to themselves and didn't pass-on their costs, but this is a different situation and maybe Japan is now coming out of its stagnant de-flation phase and moving toward and more robust economy for the first time in decades.

Article:

More items are likely to see price hikes past November if the yen remains weak and keeps import prices higher.

The survey covered data from 105 major food and beverage companies listed on stock exchanges and 90 unlisted companies.

Most likely, if the Bank of Japan doesn't intervene, the yen is going to continue to be weak, which means import prices will continue to be higher than usual as Japan is a resource-poor country and need to import many products.

The Bank of Japan's strategy, even though it might not admit it, it to just let inflation run its course with the idea and any kind of key interest rate might cause more harm than good for the Japanese economy.

Have nice day and be safe!