'Feeling guilty': Price hikes a tough sell in Japan despite inflation

The angst faced by Uniqlo and Saizeriya when they attempted to raise prices highlights the struggle Japanese firms face as they battle rising costs in a country that has experienced decades of deflation.

Uniqlo's logo at the company's shop in Tokyo, Japan. (File photo: Reuters/Manami Yamada)

TOKYO: When Japan's "symbol of affordability" Uniqlo decided to increase the price of its basic socks last month, it sparked a backlash before the clothing titan made an immediate U-turn.

That came after Italian-style family restaurant chain Saizeriya issued an almost grovelling apology as it decided to add 20 yen (US$0.13) to the price of its trademark Milanese Doria, lamenting its "lack of effort".

The very public angst - including in one of the world's most recognisable clothing brands - highlights the struggles Japanese firms face as they battle rising costs in a country where decades of deflation have nurtured a consumer class averse to higher prices.

The Bank of Japan last month declared its 2 per cent inflation target had been met, after 13 years of ultra-loose monetary policy.

CNA Games Guess Word Crack the word, one row at a time Buzzword Create words using the given letters Mini Sudoku Tiny puzzle, mighty brain teaser Mini Crossword Small grid, big challenge Word Search Spot as many words as you can Show More Show Less Measures unveiled in 2013 by then-prime minister Shinzo Abe - and continued by successive governments - were supposed to end a spiral of deflation that had plagued Japan for decades since the mid-1990s.

However, it wasn't until 2022 - when the Ukraine war triggered a global energy shock - that inflation started flickering back to life in resource-poor Japan.

Then the US-Israel war on Iran saw Tehran choke off the strategic Strait of Hormuz, slashing crude exports from the Middle East and impacting global supply chains, in turn sending company costs soaring.

While firms in most countries have been able to lift prices accordingly - albeit to expected anger - those in Japan have to battle an inherent view that hikes are taboo.

Businesses big and small have found themselves hard-pressed to plough ahead with drastic price hikes to avoid alienating customers.

Decisive increases can be more of a risk for smaller, countryside businesses whose survival often hinges on loyal patronage by regular clients.