From cafe culture to 100 yen shops, price hikes are hitting everyday life in Japan hard

Takeshi Miyagi, senior general manager of Initial One Hundred, which operates nine “The 100 Stores” discount stores in Tokyo, looks at products in Tokyo’s Meguro district on April 27, 2022. (Mainichi/Kengo Miura)

Rising commodity costs coupled with the historic fall of the yen to a two-decade low against the US dollar has pushed prices up in Japan. The Mainichi Shimbun interviewed a discount store and cafe that were hit hard by the sudden change.

Japan’s consumer price index (CPI) for April rose 2.1% from a year earlier, the Interior and Communications Ministry announced on May 20. This is the largest increase in more than 13 years since September 2008, excluding the effects of the increase in consumption taxes, and the daily lives of consumers are impacted.

During Japan’s long period of deflation, 100 yen stores – equivalent to dollar stores – grew rapidly. They have consistently posted high sales figures and their store count has continued to grow over the past decade, and the market is on the verge of reaching 1 trillion yen, or about $7.82 billion. . But the economic model is facing a major turning point.

“This is the most difficult situation we have ever experienced. At this rate, the delivery of stock for our stores will stop. If things continue like this for more than a year, the sustainability of the store will be in jeopardy. danger,” said Takeshi Miyagi, 54, general manager of Initial One Hundred, which operates nine “The 100 Stores” discount stores in Tokyo.

Of the approximately 10,000 products processed in the stores, 90% are imported. With import costs rising amid soaring commodity prices and a weak yen, the only way to sell products at 100 yen is to buy stocks at lower prices. However, Miyagi said distributors say they, too, are in trouble and can’t lower prices any further.

Lately, the company has been unable to stock up on 100 yen and has increased its stock of items costing around 100 yen, including an A4-size plastic briefcase which has gone from 100 yen to 200 yen. Gardening soil, which sells well in the spring, is purchased in China. Since it has many fans, the company tried to keep it at 100 yen. But the stores’ profits on the floor have shrunk to almost nothing, and they’ll probably have to raise prices soon.

Major 100 yen store operators have also given up selling all 100 yen products, raising the prices of more products. A distributor for a major operator said “stores and manufacturers are jostling for profit, which was slim to begin with.”

100 yen stores sell a wide variety of inexpensive everyday items, from food and tableware to stationery and toys, and are therefore both very popular and a necessity for consumers. However, an industry source said more stores are cutting products as many are no longer profitable given the wholesale price.

Meanwhile, inflation also hit a cafe in Gifu Prefecture, which has one of Japan’s highest numbers of cafes per 1,000 people. Many locals eat breakfast at these cafes, which offer “morning” menus of toast, salad, and other dishes with a coffee order.

Yukihiko Kojima, 75, is the owner of Saiwai, a 112-year-old cafe in the prefectural city of Tajimi. Although its prices have remained the same for 24 years – even after the 2019 consumption tax hike – the store had no choice but to raise the price of a cup of coffee from 400 yen to 450 yen.

The international price of coffee beans is high due to bad weather in the major Brazilian producer, and the weak yen has made matters worse. The cafe’s artisan donuts were also hit by rising flour and cooking oil prices.

A 71-year-old regular said: “The recent price hikes are tough for those of us who live off pensions, but this place has been going (keeping prices the same) for a long time. This time it just can’t be helped.” Many regulars continue to visit the cafe, which makes Kojima feel even more sorry for his customers.

In a very unusual move, the prefecture’s coffee union called on member establishments not to hesitate to raise prices. The union explained: ‘By keeping prices the same, more stores may eventually be forced to close.’ The breakfast culture at area cafes is teetering amid nationwide price increases.

(Japanese original by Tomohiro Tsujimoto, Business News Department and Seiya Tateyama, Nagoya News Center)

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