Last fall outspoken economist Noriko Hama caused a fuss with an essay about deflation in the magazine Bungei Shunju. She said that the trend of yasuuri kyoso (low price competition) was "destroying society," and not just in Japan. However, in Japan she singled out the clothing retailer Uniqlo as the main representative of this "self-strangling" movement.
Tadashi Yanai, the chairman of Uniqlo's parent, Fast Retailing, didn't mention Hama's essay when he gave an interview to Asahi Shimbun last month, but he's obviously sensitive to such charges. He said the real cause of deflation isn't competition but rather sluggish consumer spending.
That sounds logical, but it's not as if the two phenomena aren't related. During the bubble era of the 1980s, Japan was notorious for its high consumer prices and in the two decades that have elapsed since then these prices have come down. At the same time, the consumer base has shrunk as the population aged and niche markets became more dynamic.