Spending on Food on In Japan: Updated Sept. 15, 2025.

Proportion of spending on food hits record high in 80% of Japan cities

Article source: https://mainichi.jp/english/articles/20250902/p2g/00m/0bu/013000c

Ideas

Its not a surprise the food prices have increased in Japan, as inflation has increased almost every year since the pandemic.

What is interesting is, while there have been attempts to lower inflation nothing has really worked as prices are maybe at their highest ever in Japan.

Usually, such as in the US and the EU and other countries the central bank would increase the key rate as an incentive to get people to spend less and borrow less.

But in Japan the Bank of Japan never increased the key rate as they kept insisting that the Japanese economy was just too weak for a rate increase.

Japan, for the most part, for the last 20 years or so was driven by deflation so prices were lower than maybe they should have been in an economy the size of Japan, and when inflation did start to increase a lot Japanese consumers didn't know what to do.

The Engel coefficient is more like an average as yes, families are spending more on food but again it depends on each family.

Its been shown that low-income families and fixed income groups spend more on food than higher-income groups, which is logical as low-income group have less money to spend and use a larger share of their income on food.

All the coefficient is showing is the cost of food in a city and or the level of income in a city compared to other cities in Japan.

It might also indicate how much food prices have increased from city to city as maybe some cities or companies in those cities passed on their raw material costs more compared to other cities.

Also its important to think about the level of income of each city as some cities have more income and the also they type of worker in a city as wages and salaries might be much different in each city.

Japan, for a long time, had this stereotype of being this rich country but if you looked under the surface its been known not to be one of the richest countries in the world and has some of the lowest salaries for large company employees.

And then there is the idea of part-time workers and the minimum wage which again Japan might have some of the lowest minimum wage rates in the world too.

Unfortunately, many part-time workers in Japan, these days are women with families and children who need to work to help support their families and some might be single family workers.

Yes, around the time of the pandemic noticeable inflation hit Japan and has continued to increase ever since then and consumers, again, were unsure what do to as before that time, deflation was in Japan, which meant lower prices on most things.

The problem in Japan was/is consumer spending, which is about 50 percent of GDP in Japan was/is always a challenge and which means it never reached it full potential.

As a result, while other countries which experienced inflation also had increased consumer spending too, but Japan was the opposite as its consumers never spent like they did in the US which meant the Bank of Japan really couldn't use the key rate to reduce spending as it was always very low.

Again, each city in Japan is different as for example Osaka, which is Japan's second largest city or metro area, might not be that affluent as its coefficient was 31.2 which means that workers in Osaka might not have a much money as some other workers in other cities.

It also might mean Osaka has more workers who work for small and mid-size companies compared to large companies like in the Tokyo metro area.

And then there is the continued problem with rice prices as rice is a major food staple in Japan but has had problems ever since the summer of 2024 when there was a supposed rice shortage and prices have yet to decrease going on over one year.

Japan back in the 1960's had sustained inflation which at the time was due to the Japanese economy mostly overheating as it was growing very fast, maybe too fast, and prices were just too high at that time.

And at that time Japan was still coming out of the WW11 period and growth was increasing but not all of Japan had reached the level of a emerging country just yet as it took another decade for all of Japan to reach that level and then again, exploded into a major economy in the 1980's and it was thought of at that time it would over take the US and its economy, which of course it never happened. as some today say Japan back in the 1960 to 1980 period grew too fast and didn't really build as solid growth foundation for the future as might evidenced today.

Have a nice day!