TOKYO: Uniqlo ditched plans to raise the price of its popular ¥290 (IS$1.84) socks, underscoring the challenge Japanese retailers face as persistent inflation squeezes household budgets.
Earlier this month, the apparel brand owned and operated by Fast Retailing Co. had announced broad price hikes for its clothing products due to rising input costs. Less than two weeks later, it reversed a decision to increase the price of its socks by ¥100 (US$0.63), and eliminate discounts on purchases of three or more pairs.
Uniqlo’s swift response to the socks price hike followed an outcry on social media from shoppers frustrated by higher prices. One user on X wrote that "I work full time, do the housework and raise my kids. What more am I supposed to do?” Others said they rushed to stock up before the new prices took effect.
"As socks are an essential everyday item, in Japan we reconsidered our planned price revision,” a Fast Retailing spokesperson said.
After decades of deflation, which conditioned Japanese shoppers to expect flat prices, retailers are struggling with how much of their rising costs they can pass on to customers.
Consumer prices, excluding fresh food and other items, climbed 3.2 per cent in September from a year earlier, while household spending is shrinking, reflecting the challenge companies face when seeking to protect margins.
"The fact that they decided not to go ahead with the price increase suggests they were very conscious of consumers’ resistance to higher prices,” said Atsushi Takeda, chief economist at Itochu Research Institute
"It’s no longer just lower-income consumers who are feeling the strain, but consumers somewhat higher up the income scale are also increasingly becoming wary of rising prices.” - Bloomberg
