Jiji PressTOKYO (Jiji Press) — Supermarkets and convenience stores are cutting prices on processed food products and daily necessities, as concern over the future course of the economy and sluggish growth in disposable income leave customers reluctant to loosen their purse strings.
Those retailers rely on cost reductions and other measures to make room for price cuts despite their not-so-easy business environment, which is weighed down by high levels of labor and distribution costs.
Daiei Inc. will lower the prices on some 1,300 items, including frozen food products and seasonings, by 10-20 percent on average for about three months from Wednesday.
The supermarket operator, which revises the list of items for price reductions every three months, will be offering one of its largest markdowns in terms of the number of items involved.
A spokesman said items with lower price tags tend to see sales growing 20-30 percent.
Last month, Seiyu GK, a unit of U.S. retail giant Wal-Mart Stores Inc., cut prices on 466 food and daily necessity items by some 6-10 percent on average, while Aeon Co. offered an average price reduction of some 10 percent for 114 items sold under the Aeon brand.
“We managed to realize price cuts by streamlining production and distribution processes,” an Aeon official said, adding that the company will continue to offer prices friendly to customers through price revisions.
Convenience stores are also under pressure to revise down prices, deviating from their tendency not to offer discounts.
Seven-Eleven Japan Co., a unit of Seven & i Holdings Co., and two other major industry competitors in Japan have been selling daily necessities, such as detergent, at cheaper prices since last April.
Lawson Inc. President Sadanobu Takemasu said, “Our conventional price strategy is not good enough if we want customers not only to pick up products for their urgent needs, but also to shop at our stores regularly.”
At supermarkets and convenience stores, same-store sales in July remained largely flat from the year-before levels despite summer heat waves, a positive factor.