Photo/Illutration Food on supermarket shelves in Tokyo in December 2022 (Asahi Shimbun file photo)

More than half of major companies plan to raise prices for clients and consumers by the end of the year or believe price increases may occur, a survey by The Asahi Shimbun found.

Of 100 companies surveyed between July 3-14, 33 said they plan to increase the prices of their products or services between July and December. A further 24 said increases are a possibility.

"Increased raw material prices and transportation costs have weighed heavily on our operations," Naomi Ishii, executive vice president of Suzuki Motor Corp., told the survey. "We cannot offset them by reducing expenses and cutting down on costs."

Tamotsu Hiiro, president of McDonald's Holdings Co. (Japan), said, “The yen’s depreciation and the spike in raw material prices, which started last year, are expected to stay.” 

Of the 57 companies, 53 have already raised prices between January 2022 and June this year.

Only 13 respondents said they will not raise prices. This group included financial companies. 

The remaining 30 companies gave other answers.

The prices of resources and raw materials rose sharply after Russia’s invasion of Ukraine last year. They have been buoyed by a recovery in demand since the COVID-19 pandemic eased.

The yen’s depreciation on the back of interest rate hikes by U.S. and European central banks has also pushed up prices of goods and services because imports are more expensive.

The survey asked the 57 companies that plan price increases or believe hikes may occur to say why. They could choose up to two reasons for their answer.

In all, 53 companies cited increased energy and raw material costs. Twenty mentioned the weakening yen and more expensive imports.

Some cited human resources. Eleven companies attributed the hikes to improvements in the treatment of their workers.

A further 10 companies cited advances in quality and performance.

Some companies said consumers are embracing higher prices.

“We feel that customers have taken a break from their saving-oriented lifestyles and have come to accept price increases,” said Naoya Araki, president of H2O Retailing Corp., whose subsidiary operates the Hankyu and Hanshin department stores.

Makoto Tani, chairman of Skylark Holdings Co., said the company has differentiated prices at its restaurant chains based on where the outlets are located. It has hiked prices in urban areas but kept them low in rural areas where diners are returning only slowly.

Tani said the average spending per customer has risen overall.

Kensuke Hosomi, president of FamilyMart Co., said sales of fried chicken, coffee and other items have remained more or less unchanged since the convenience store chain raised prices last year.

“We are gaining customers’ understanding for price increases,” Hosomi said.

He added that products on the market will be divided into two groups: high added-value items with higher price tags, and items that are strategically kept at low prices.

(This article was written by Tomoya Fujita and Takaya Katada.)

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