Uniqlo Sock Hike Reversal Follows Saizeriya Doria Price Protest
“When I imagine myself suddenly announcing a 200-yen hike, for example, I cannot help but feel guilty and sorry for our customers who have supported us for years,” Sachi, a 68-year-old ramen shop owner in western Japan’s Okayama region, told AFP during a recent trip to Tokyo.
That reluctance to pass on costs underpins a broader consumer backlash across Japan, where clothing giant Uniqlo swiftly reversed a price increase on its basic socks last month after drawing public criticism. The incident followed an almost grovelling apology from Italian-style family restaurant chain Saizeriya when it added 20 yen to its trademark Milanese Doria, lamenting what it called a “lack of effort”.
Decades of Deflation Fuel Consumer Resistance to Price Hikes
The public angst highlights the intense pressure Japanese companies face as they absorb rising costs in an economy where decades of deflation nurtured a consumer base deeply resistant to higher prices. The Bank of Japan declared in October that its two percent inflation target had been met after 13 years of ultra-loose monetary policy. Measures introduced in 2013 by then-prime minister Shinzo Abe were originally designed to break the deflationary spiral that gripped the country from the mid-1990s.
Inflation finally returned in 2022 when the Ukraine war triggered a global energy shock in the resource-poor nation. Subsequent disruptions, including the US-Israel war on Iran and the resulting choke on crude exports through the Strait of Hormuz, pushed corporate operational expenses even higher. While businesses in other nations adjusted prices with standard consumer friction, Japanese firms continue battling an entrenched cultural view that price increases are taboo.
Small business owners absorb rising operational costs
Independent operators in rural regions face even higher stakes, as their survival depends on loyal patronage from regular customers. Sachi continues holding off on raising menu prices despite snowballing expenses. “So my thinking is, ‘I would rather persevere myself,'” she told AFP, noting that many small businesses share that sentiment.
Corporate giants have deployed different tactics to manage the backlash. Uniqlo rolled back its sock price hike to protect its reputation as a paragon of affordability. Saizeriya raised prices across almost its entire menu, prompting its president to vow at a news conference to look for excuses to lower prices again. Even so, the restaurant chain kept its wine priced at 100 yen per glass because management wants it enjoyed casually, its public relations office told AFP.
Bank of Japan raises borrowing costs
Soaring grocery bills leave households with less disposable income for clothing and dining out, even as labour and material costs mount for retailers. Official Labour Ministry statistics show real wages increased year-on-year for eight consecutive months.
“Food prices are getting insanely high, so I have to increasingly rely on stuff imported from overseas because home-grown products cost me more,” Tokyo office worker Kazuhiko Sato said, adding that he is eating out less frequently. Meanwhile, the Bank of Japan raised borrowing costs to a more than 30-year high.
University of Tokyo economics professor Tsutomu Watanabe noted that pay raises remain insufficient and fail to reach everyone. While other Group of Seven economies experienced comparable inflation, their wage hikes kept consumer spending from weakening in the same manner.
Frequently Asked Questions About Japan’s Price Hikes
Why did Uniqlo reverse its price increase?
Uniqlo rolled back the price hike on its basic socks to protect its long-standing media image as a paragon of affordability after the initial announcement sparked a consumer backlash.
How much did Saizeriya raise its menu prices?
Saizeriya added 20 yen to its trademark Milanese Doria and implemented increases covering almost all menu items, while keeping certain items like 100-yen glasses of wine unchanged.
What caused the recent inflation surge in Japan?
Inflation returned following the 2022 energy shock triggered by the Ukraine war, followed by Middle East conflicts that restricted crude exports through the Strait of Hormuz and drove up company operating costs.
What are interest rates currently doing in Japan?
The Bank of Japan pushed borrowing costs to a more than 30-year high as part of an ongoing effort to manage inflation after declaring its two percent target met.
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