Japan Food Price Increases: Update October 10, 2024.

 

Japan to face price hikes on 2,900 food items in Oct., most in 2024

Article Source: https://mainichi.jp/english/articles/20240930/p2g/00m/0bu/017000c

Ideas:

Japan, unfortunately, is a resource poor country and has to import much of what is needs, meaning its subject to global price increases on raw material products and subject to the weak Japanese yen which cause domestic prices to increase a lot.

You would think maybe the Japanese government would find ways, such as trade agreements, to help lower the price of many products going into Japan.

For a long time, many Japanese companies were reluctant to pass-on their increase costs to retail consumers as they were afraid of losing customers. But this is a new era and now many company easily pass-on their costs as they need to maintain their profits margins.

Increased logistic costs have been going up since the pandemic and these is no other real example than looking at airline ticket prices and the extra cost that airlines now charge customers.

Labor costs is very much different a wage increases have increased, due to the Japanese government urging many companies to increase wages and of course companies will pass-on their labor costs to the next in the supply chain including the final retail customer.

Recently, unfortunately, there have been reports of some companies going out of business because they couldn't afford the increased wage increases and or at the same time could find enough labor for their company, as again, they couldn't afford to pay what workers want or need.

Labor costs, most likely are going to continue to increase, which means more companies pass-on their labor costs to whomever in the supply chain, which means more price increases in Japan for the time being.

Maybe if Japanese companies had been increasing wages consistently over the years, there would not be this crisis on price increases now in Japan.

You can't blame the weak Japanese yen for all of Japan's ills as again, if companies had been increasing wages consistently, instead of all deciding around the year 2000 not to increase wages, there would not be the current wage increase crisis and price increases on products.

This is a situation, again, the could have been avoided if Japanese companies would have just increased wages consistently and not tried to avoid wage increases as many Japanese companies tried to do back in 2000, as they were following the leader, which at the time was Toyota which Toyota decided not to increase wages at the time, and the it just continued on on since then, until 2023 when many companies, due to the Japanese governments urging decided to increase wages again.

Have a nice day!

Workers and Wage increases; Update July 20, 2024.

 

Only 6% of workers in Japan say wage hike rates larger than price increases: poll

Article Source:  https://mainichi.jp/english/articles/20240717/p2a/00m/0bu/013000c

Ideas:

The problem is, wage increases are only a one time increase, usually in April, but inflation seems to increase monthly. So even if wage earners might have got a 5% wage increase inflation might have increased monthly, which means inflation most likely, in summary, was more than the 5% percent wage increase.

Part of the problem might go back to the beginning of the 2000's as many companies, back then, didn't give pay increases until maybe 2023.

It must also be remembered, that maybe 70 percent of wage earners in Japan don't work for large name brand companies and work for small and midsize companies, which might not have had a 5% percent increase, but much lower, if any at all.

The respondents in the survey might come from large array of workers in different size companies, and again, small and midsize company workers might not have gotten the same wage increase as large company workers.

Every worker or Japanese household is different and they see pay increases differently according their needs and wants. Some might see the 5% percent, if they got that, as good, while some might see it as not enough that barely covers their monthly expenses, or gives them little or no extra income.

It must be remembered, again, that between April of 2023 and April of 2024, inflation in Japan increased a lot. Even if inflation each month was not that much, if you add up each month, most likely it was more than 5%, which makes the 5% wage increase not so good.

Only 5% of non regular employees said pay increases were larger, which is not that large and not surprising, as maybe many non regular employees might not have gotten a wage increase at all.

But only 7.3% of regular workers said wage increases were enough, which means maybe 86% felt wage increases were not enough compared to increases in inflation.

Most likely those in the 20's and 30's have less financial responsibilities than the older groups and maybe the wage increase gave those in their 20's and 30's more extra income.

And as expected, those in their 50's and 60's with more financial responsibilities felt wage increases were not enough and didn't give them enough extra income compared to price increases.

And yes, as expected, unfortunately, over 70% in the 50's and 60's felt wage increases were not enough to cover the price increases and or didn't increase their extra income.

Yes, the overall wage increases either have not take affect and or Japanese workers, at this time are just sitting on the wage increases and deciding just what to do and maybe many ar still weary of the inflation situation.

For non regular employees its very different story, as they are constantly stressed out by their low wages and or company benefits or a combination of factors.

Yes, some companies might have given good wage increases for non regular workers, but that is not the case with all companies who see non regular workers as just nonessential commodities that can be easily replaced.

The minimum wage situation in Japan, unfortunately like some economies is not so good, as many companies don't want to pay a lot for some workers and they keep the minimum wage low, as companies try to limit their costs.

Have a nice day and be safe!

Japan Christmas Prices: Updated Feb. 15, 2024

 

Price of Christmas cakes in Japan rises by avg $3.70 vs 2021

Article Source: https://mainichi.jp/english/articles/20231209/p2a/00m/0bu/013000c

Ideas:

Whenever I would go to Sogo department store, at Yokohama station, as you enter Sogo is seems like its noting but confectionery places on the first floor. There first floor is confectionery places, other places selling bento boxes or take out lunch or dinner sets, and in the back is the grocery store area

But when I went there in Jan. of this year, there were just as many customers buying things as before, It didn't seem like the higher prices, at least in Sogo, for customers buying things.

My partner and I did buy a cake, for a friend's family, and the price was more than before when we bought the same cake the year earlier.

The Xmas or New Year holiday season is an important time for Japanese gift giving, not so much for Xmas but year end gift giving is an important relationship activity in Japan.

For many years, if not decades, Japanese companies were reluctant to increase prices with the idea of losing customers. But now, as raw material prices continue to increase and profit margins of companies continue to decrease companies now have no choice but to increase prices. 

And it makes it easier if all companies within a specific sector, such as those in the confectionery sector increasing prices, it become easier for a company to do the same thing.

Of course now that the pandemic has ended maybe more people are in a Christmas mood and want to buy things to give to family and friends, like everywhere in the world.

Maybe during the Christmas and New Year Holiday period, people forget, somewhat about inflation and the increase in prices and just buy, within reason, what they want and need.

The prices of fruits and vegetables are subject to the growing season and the weather so maybe the extreme summer heat in Japan during the summer, which lasted well into October caused a reduction in the supply of strawberries.

Transportation costs and material cost increases all seem to have increased which means companies are passing-on their increased costs to the next in supply chain including the final customer.

No doubt as inflation continues on in Japan, many people after the Christmas or New Year period will reduce their spending as maybe they bought a lot during the holidays but now need to spend less.

Have a nice day and be safe!

Japan Price Increases: Ideas: Updated Feb. 12, 2024.

 

Prices of over 30,000 food products in Japan raised in 2023

Article Source:https://mainichi.jp/english/articles/20231201/p2a/00m/0bu/003000c

Article:

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!