A wide array of consumer products are being offered at lower prices in the midst of increasing price awareness among Japanese buyers. The same consumers, however, are also buying more high-value goods.
Prices went down two months ago for 53 out of 80 types of grocery items from a year earlier, according to Nikkei’s point-of-sale (POS) data. The data audits 80 fast moving consumer products from about 450 retail stores in Japan.
A detailed assessment is not possible due to the unique variations for each type of product, however, the range of products that have seen falling prices had increased to a level that the country had not experienced in more than five years. The last time was before Prime Minister Shinzo Abe assumed office and instituted Abenomics on Japan.
Prices of 33 food categories dropped in January, along with 20 daily products. Salad oil was the worst hit among food items dropping by 13.3 percent.
In January last year, as the Japanese currency rose back from its 2015 levels, butter prices together with other foods that are dependent on imported raw materials slipped back but now they are joined by a wider range of everyday items.
The younger consumers will most likely be the first to seek cheaper prices, said analysts.
Prices of higher-quality, value-added products have increased considerably though. Foods such as cereals have climbed 5.8 percent. Chocolate rose 2.7 percent, fueled by commodities with high cacao ingredients and more health conscious buyers.
Fast moving consumer products with added value have also increased their prices. Prices of liquid dishwashing soaps have gone up by at least 15 percent from a year earlier. A spray soap which was introduced last October by Kao, that washes utensils without the need to scrub, is currently priced at twice the amount of the common brand of dishwashing detergent. Kao said the product is still selling more than double the quantity of units that they had expected it to.