Prices of over 30,000 food products in Japan raised in 2023
TOKYO -- The prices of 32,395 food products were increased in Japan in 2023, far exceeding the hikes for 25,768 items last year, private research company Teikoku Databank Ltd. announced on Nov. 30.
While the large number of food price rises this year has helped improve manufacturers' profitability, consumers are showing signs of "fatigue," with sales volumes of some food products declining after their prices were increased. Meanwhile, there was some minor good news for consumers as the pace of price hikes has slowed since the summer.
Ideas:
For many years, if not decades, Japanese companies were either reluctant or afraid to increase prices for fear of losing customers. But as inflation as has continued in Japan, companies now have no choice as their profit margins continue to decrease and they have to increase prices to stay in business.
No doubt they figured into their price increases the possibility of losing some customers, but since many companies were increasing prices maybe they felt its OK, as many companies now in Japan are increasing their prices too.
Yes, "fatigue" among customers is a real situation, especially among the lower income groups as they spend more on food than the higher income groups.
Price increases might have slowed some, but it the slowing of price increases enough for Japanese consumers to feel good again about going to back to supermarkets.
Article:
Given these factors, Teikoku Databank expects that the prices of up to around 10,000 food items will be increased in 2024, but that these hikes that have continued for about two years will "settle down" for the time being.
The average rate of price increases each time in 2023 was 6% to 14%. The trend of passing on skyrocketing raw material costs and higher labor costs due to worker shortages to retail prices continued. By category, the prices of 11,837 processed food products were raised this year. Prices also went up for 8,052 seasoning items, 6,175 alcoholic beverages and other drinks, 2,270 confectionery items, 1,533 dairy products, and 865 raw materials.
Ideas:
Just what does 'settle down" mean related to price increases. Will prices in Japan continue to increase or will they increase just a little and so on.
Even at 6% to 14 % in price increases that might be just enough, for some customers to decide not to buy and or look for substitutes, as each customer has a limit on prices they like.
For example maybe a product increased by 14% and a customers feels they price now it too much to buy so again, they might not buy or looks for something else instead.
Of course if all food products in that category have gone up a customer might just buy one anyway as they feel they have no choice.
Labor shortages and workers shortages seems to be major challenge now in the Japanese economy as some/many companies are having problems with hiring and keeping workers, especially those hit by the pandemic.
Article:
Price hikes are scheduled for 1,596 food items from January through April 2024, mainly for raw materials such as olive oil and sesame products, seasonings such as broth products and ketchup, and frozen foods. However, the pace of price increases is slowing significantly, as the figure is down about 80% from the same period in 2023.
Teikoku Databank also pointed out that there are uncertainties from April 2024 onward. The company noted that the expected price increases for supermarket food trays and other items due to the weak yen and high crude oil prices may affect food prices as well. In addition, labor costs are expected to rise further if wages are raised in annual spring labor negotiations.
Ideas:
When I was in Japan in January, we went to several restaurants and we noticed each restaurant had increased their prices, Not by much but enough to notice prices increases.
As Japan is a resource poor country, it needs to import, including food or food raw materials, which means the weak yen will continue to keep prices high as importers will have to pay more, which of course means the next in the supply chain will have to pay more, which means eventually the final customer will have to pay more too.
Even though prices might be decreasing or the increase in prices might be slowing down, is it enough, again, for the average Japanese customer to feel good about shopping for food in supermarkets or in 2024, are they going to have to continue to look for bargains, if they can find them.
Finally, again, as Japan is resource poor country, unless the Japanese yen become relatively strong compared to the US dollar or Euro, Japanese consumers will continue to pay higher prices.. But that is not likely to happen as a weak Japanese yen is a major incentive for foreign tourists to enter Japan and spend a lot of money.
Have a nice day and be safe!
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