Shoppers start coping with higher sales tax

by Eric Johnston and Tomohiro Osaki

Staff Writers

Tuesday’s hike of the consumption tax to 8 percent saw mixed reactions in Tokyo and Osaka. While consumers in both cities seemed resigned to the increase, there was concern about the additional transportation and food costs.

In Osaka, as in other parts of the country, Monday night saw long lines at department stores, supermarkets and gas stations as people got in under the wire to buy clothes and household items, canned and packaged foods, and gasoline before the increase. Some shops dropped their prices as well to take advantage of the last-minute shopping spree.

For the most part, consumers proved largely unfazed by, or even resigned to, the hike, saying they could hardly argue against it given its supposed aim to finance bulging social security costs.

The last-minute rush to buy smaller items followed months of purchases of more expensive items. At Yodobashi Camera in Osaka’s Umeda district Tuesday, people were looking for bargains, but a few customers said they weren’t planning on making large purchases.

“I bought a new smart tablet about a month ago, partially because I figured it would be cheaper to get it before the consumption tax was raised. I’m just going to get small, inexpensive items today,” said Mina Kitamura, 22, an Osaka college student.

“We got a new air conditioner a couple of weeks ago. I was thinking about getting a new computer, but I’ll probably hold off unless prices really drop to make up for the tax increase,” said Atsushi Yamaguchi, 53, who works in central Osaka.

In Tokyo, a 23-year-old Minato Ward university student said he noticed no difference in prices when shopping at a supermarket Tuesday. He brushed off the hike as no big deal, saying he doesn’t believe it will have any significant impact on his life.

“I think we’re just going to have to deal with it. There is nothing we can do,” he said.

A housewife in her 40s, who asked to remain anonymous, said she did see a subtle price rise in “the usual grocery stuff” she bought. But she also stressed that she doesn’t particularly mind the hike, describing it as a national policy she has no control over.

“As long as you refrain from buying something really huge, I don’t think the hike will affect your life,” she said.

Restaurant owners were mixed. Some were worried it will lead to further price cuts in what is already a tough business, but others were hopeful that people are done buying big-ticket items and will now spend more on less expensive pursuits like dining out.

“We’re hoping customers who cut back on eating out over the winter months and spent money on other things will now return,” said the owner of a cafe near Osaka City Hall.

But while consumer goods and eateries are optional expenses, transportation fees are not. Concern was expressed in Osaka and Tokyo about the rise in train, taxi and subway fares.

And although resigned to the hike, Tokyo retiree Kenji Sekine, 66, noted the government in October 2012 was found to have misused money set aside for rebuilding the devastated Tohoku region for unrelated projects.

“I have to say the sales tax hike smells fishy too,” he said.