Japanese consumers can expect to take a bigger hit to their wallets as food price hikes expand to more products this month, the result of a global surge in raw material prices and increased demand in China as its economy recovers.
A succession of price hikes have already put a heavier burden on families, leading to fears that Japan's own economic recovery as it comes out of the state of emergency will be hampered.
Major dairy manufacturers Megmilk Snow Brand Co. and Meiji Co. increased prices for margarine and other products that were shipped on Friday. The retail price of a 160-gram pack of Megmilk's Neosoft margarine, including tax, is expected to rise about 16 yen.
The hike for margarine can be traced to poor weather in North America, which produces soybeans and rapeseeds, and higher demand in China and around the world inflating the price of cooking oils and fats.
According to Satoru Yoshida, commodity analyst at Rakuten Securities Economic Research Institute, the international trading price for soybeans in September rose by 30% compared to the same month the previous year, and by 70% for rapeseeds.
-- Restaurants also join in
The restaurant industry is also being forced to raise prices.
Matsuya Foods Holdings Co., which operates the gyudon beef bowl restaurant chain Matsuya, increased the price of its standard beef bowl for the first time in 3-1/2 years due to soaring prices of imported beef.
On Tuesday, the signature menu item rose from 320 yen (290 yen in Okinawa Prefecture) to 380 yen nationwide.
Other gyudon chain operators such as Yoshinoya Holdings Co. and Zensho Holdings Co., which operates the Sukiya chain, are currently remaining cautious about hiking prices.
But, a Yoshinoya official said, "If the price of imported beef remains high for an extended period, it will inevitably have an impact on the price [of our products]."
Vegetables are also expected to rise further, according to estimates for 14 vegetables in October, based on wholesale prices, released Wednesday by the agriculture ministry.
Because of a record-high heat wave and inadequate rainfall in Hokkaido in July, potatoes and onions are expected to be over 20% more expensive in October compared with usual years.
Chinese cabbages, lettuces and eggplants will likely fetch higher prices in the first half of October due to delayed growth stemming from extended periods of rain in the first half of September.
-- Covert price hikes
Some companies, anxious to keep from losing customers, are using the tactic of changing the content of their product and not the price, which actually makes the product more costly.
Major department store operator Matsuya Co., which will soon start accepting reservations for over 40 kinds of Christmas cakes made by top hotels and restaurants, says this strategy is being used leading up to the holiday season.
"No brand changed its price from last year, but some are employing other means, such as using cheaper strawberries and other fruits than usual, or simplifying the design of their cakes," said a Matsuya official in charge of confectioneries.
Yoshiki Shinke, senior economist of the Dai-ichi Life Research Institute, likens the price rises to an additional tax on households.
"While incomes barely increase, the amount spent on food and necessities is growing," he said. "That makes these recent increases to be like a tax hike. This could curb spending on leisure and dining out after the state of emergency, as people become more conscious of keeping their current lifestyle."
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