Japan’s famous 100-yen shops fall victim to a living crunch

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There can’t be a home in Japan that doesn’t have stuff from a 100-yen store — everything from chopsticks and teacups to air fresheners and garbage bags.

But hugely popular discounters – whose roots lie in the country’s long struggle against deflation – are having to settle for their unique selling propositions as rising commodity costs, the war in Ukraine and a weakening yen force companies to raise prices.

With soaring prices now affecting staples like instant ramen and sushi, the existential crisis will become the most pressing issue in next month’s House of Lords election.

Executives at 100-yen stores, where each item traditionally costs the equivalent of 60p, believe rising prices pose a potential threat to the 1-Tn sector.

“This is the most difficult situation ever,” said Takeshi Miyagi, senior managing director of Initial One Hundred, which operates nine discount stores in Tokyo.

“At this rate, the delivery of stock to our stores will be stopped. If this lasts longer than a year, the existence of the shop is at risk.

In addition to rising commodity prices, the yen has fallen against the US dollar for 24 years this week, pushing imports from 90% of the commodity cost chain even higher. In response, stores were forced to sell select items for 200 or more.

Similar pains are being felt elsewhere in the world’s third largest economy.

Families already feeling the effects of the coronavirus pandemic are paying 50% more for cooking oil than a year ago and almost a third more for mayonnaise, according to analytics firm True Data. Margarine, spaghetti and white bread cost 10% more.

Sushiro, Japan’s largest assembly-line sushi chain, will end its 100-plate offering for the first time in nearly four decades. As of October, the cheapest sushi will cost between 120 and 150 yen, depending on the location, the company said.

According to credit research firm Tikoku Databank, the price of more than 10,000 groceries will increase by an average of 13% this year. The credit research firm’s survey found that 105 major food manufacturers had hiked prices on 6,285 products through June and have plans to hike prices on 4,504 products starting next month.

In addition, nearly three-quarters of restaurant operators plan to raise prices in the current fiscal year and pass the rising cost of ingredients on to customers, according to a survey by Nikkei Business newspaper.

A recent poll by the Kyodo news agency found that 64.1% of respondents thought Kishida’s response was “inappropriate,” with more than 70% saying the cost of living would be a factor in how it fared in next’s upper house election month would vote. .

With the Upper House elections approaching, Prime Minister Fumio Kishida has responded to criticism that he has acted too slowly by setting up a task force to discuss measures to curb inflation and stimulate wage growth.

The prices of staples like sushi and ramen have increased in recent months. Photo: Sakura Murakami/Reuters

During a televised election debate on Tuesday, Kishida said price increases in Japan are not as dramatic as in the US and Europe.

He vowed to stem rising farm prices and cut electricity bills, but ruled out a 10% cut in the consumption tax, which helps pay Japan’s rising Social Security bill.

Kishida is not the only senior official to be criticized. Bank of Japan Governor Haruhiko Kuroda expressed his anger this month when he said he believes consumers are “more accepting” of rising prices. He later retracted the comment, calling it “completely inappropriate.”

People struggling with a shrinking household budget accused the governor of the central bank, which this week opted to keep ultra-low interest rates, of being out of touch.

“I limit eating out,” Seiko Fukuchi, an 82-year-old woman who shops at a supermarket in Tokyo, told Mainichi. ,[Kuroda] And the people around him may be living a good life, but there are some people who are having trouble commuting due to the coronavirus. I want him to think before he speaks.”

A 74-year-old retiree told the newspaper that Kuroda’s comments “really outraged her,” adding that she was concerned the situation would be worse than the 1973 oil crisis.

“I thought, ‘Try living on the same wage as the average person for a month. My generation experienced the oil shock, but then it was okay because our wages went up too. But this kind of inflation scares me.’ I can’t go out and do anything fun that costs money.”

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