Japanese businesses face resistance to price increases

Economy · First reported 8 Nov, 03:33 · Updated 03:46

Image: Wikimedia Commons · Francis Matahum · CC BY-SA 4.0

Rising costs are prompting Japanese businesses to consider higher prices, but decades of deflation have left many consumers wary of increases. Uniqlo reversed a sock-price rise and Saizeriya apologized for a 20-yen increase; economists say wages and consumer acceptance remain central to whether businesses can pass on costs.

Uniqlo reversed a planned increase in the price of its basic socks after a public backlash, while Saizeriya apologized for adding 20 yen to its Milanese Doria.
Businesses face rising labour and material costs, while higher grocery bills are reducing household spending on items such as dining out and clothing.
A University of Tokyo economist said pay rises remain insufficient for many people and estimated it may take another three to four years for consumers to accept persistent inflation.

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Key facts

Saizeriya menu increase: 20 yen for its Milanese Doria.
Inflation target: The Bank of Japan said its 2% target had been met.
Real wages: Recent labour ministry statistics showed year-on-year increases for eight consecutive months.
Economist’s estimate: Consumer acceptance of chronic inflation may take another three to four years.