As if war, COVID-related disruptions and higher material costs weren’t enough, Japan’s retailers now have to contend with a weaker yen that’s raising import prices and forcing them to deal with a phenomenon unseen for the better part of three decades: inflation.
"It’s a double punch,” beer importer Tsutomu Kobayashi said of the sinking currency, adding that his sales have slumped to a third of what they were two years ago. "With the weaker yen, nothing is going well for us.”
With wage growth still anemic, retailers have long been reluctant to raise sticker prices for fear of scaring off customers accustomed to years of deflation. Now that’s starting to change, with everything from the price of beer and soy sauce, to fried chicken nuggets and burgers, starting to climb as businesses pass on costs to shoppers. How aggressively and how quickly they can do so is becoming a dilemma, lest they put at risk Japanese consumers’ appetite for spending, which accounts for more than half of the economy.