Discount Supermarkets Win in Japan Spelling Doom for Abenomics

Close to the entrance of a Seiyu supermarket in Tokyo’s Akabane area, there is a large display of drinks, instant noodles, potato chips and the like all priced at 81 yen — as much as a 30 percent discount. The store set up the bargain section at the end of October, around the time the first whispers of an early general election were being heard in the capital.

Seiyu had always followed a low-price strategy as opposed to the special sales common at many other supermarkets, but with the chill in consumer spending the store decided to make a point of going yet cheaper to entice more customers.

“I take a 15-minute bus ride to come here and do all my shopping in one go,” a 60-year-old housewife told the Mainichi. She appears not to be alone, as the Akabane Seiyu is on-track to beat its sales mark for last year.

“The consumption tax hike in April landed on top of already higher prices, and people are loath to open their wallets. That’s been a big boost for us,” the 50-year-old store manager commented.

Saitama Prefecture-based discount supermarket Marusan-Ai Co. has also benefitted from the consumer’s search for low prices. A walk up and down the aisles turns up startlingly cheap food items — 10-yen carrots and 99-yen packages of eggs. The chain opened a string of new stores between April last year and October this year, and Marusan plans to double its number of stores in five years. While other supermarkets, department and convenience stores have seen seven straight months of dropping sales compared to 2013, Marusan is sprinting down the expansion road.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza