Retailers are lowering prices to attract customers, a trend noticeably strong at food and clothing stores as well as restaurant and fast-food chains.
Low-price products must be welcome to households that are tightening their purse strings in the face of summer bonus cuts and the nation's rising unemployment. Consumers are becoming more conscientious about searching for bargains and getting the maximum value out of their money.
Large supermarkets are selling "third beer," a beer-like alcoholic beverage, for around ¥100 a can. These are not sacrifice-sale products sold at a loss but rather private brand products specially developed by alcoholic beverage makers in cooperation with the supermarkets. Some supermarkets have been converted into discount stores and are selling vegetables and other foodstuffs at 10 percent to 30 percent cheaper than usual.
One restaurant chain is increasing the number of its low-price restaurants while reducing the number of its high-price units. In its Chinese restaurants division, around five items on the menu have been reduced in price by about ¥100. A hamburger chain has reduced the prices of some of it's lunch-time items by up to ¥160 and has stated that it will continue lowering prices.
Household budgeting amid concern about income prospects is not the only influence on recent price movements. Some consumers have become more eco-aware and are making efforts to be less wasteful. Others even enjoy economizing and being more creative with the variety of low-priced items, for example in fashion. All this points to new business opportunities and an optimistic outlook for companies ready to develop products that meet the demand of these people.
Cutting prices, however, does have a downside. The enterprise price index in June dropped a record 6.6 percent from a year before, raising fears of deflationary pressure on the economy. The government should confront the root of price drops and do its utmost to improve the employment situation, strengthen social security and expand education opportunities.
