Retailers who’ll come out ahead

Regarding the April 4 Jiji article “Tax hike to spur retailing industry shakeout“: The three-percentage-point rise in the sales tax on April 1 was a rather earthshaking event, leaving Japanese shoppers and retailers groping for balance in the new market. Consumers are hesitant to buy as they gauge its impact on their wallets. Retailers are divided on marketing and pricing strategies, as they keep a watchful eye on how customers’ spending habits are evolving.

What if this had happened in the United States, where diners typically tip their waiters up to 10 percent or more of the check amount, and where shoppers commonly leave odd change with the cashier? What if this was a European nation where consumers are accustomed to currency fluctuations, using euros, pounds and francs? What if buying cheaply or expensively was a real choice in Japan as it is in China?

Japan has been a nation of flat, standardized and clear-cut prices, all paid in yen. A can of soda is ¥120 downtown or in the countryside. A dinner won’t be bad just because it’s cheaper than others. It costs the same to take the train during peak and off-peak hours. Prices are fixed, so tipping at a restaurant or telling someone to keep the change isn’t done.

In a country where people are accustomed to flat prices and do not have a lot ways to cushion the impact of price fluctuations, the increase in the sales tax from 5 percent to 8 percent is hard to adjust to. Since they can’t buy cheaper stuff, the only way to keep living costs constant is to buy less.

Japanese retailers need to provide customers with more choices. Those who provide consumers with the most flexible pricing options — taking into account variables such as time of day, volume, quality, currency and even gratuities — will probably win the day.

jun shiomitsu
tokyo

The opinions expressed in this letter to the editor are the writer’s own and do not necessarily reflect the policies of The Japan Times.