Wage growth cannot keep up with price rises… Households and companies are deeply troubled

Prices keep going up.

Meanwhile, wage growth has not kept pace.

In such a situation, the number of people who visit the consultation desk to review their household finances has increased rapidly.

Companies are also suffering because they cannot easily pass on the cost increase to their prices.

Experts predict that the rate of increase in prices will increase further around autumn, and the burden on household budgets is likely to become even more serious.

Prices for goods and services consumed at home will fluctuate…

A consumer price index that looks at the price movements of goods and services consumed at home.

In July, the index that excludes fresh food, which fluctuates greatly due to the weather, was 2.4% higher than the same month last year.

It is the fourth consecutive month that the 2% target set by the government and the Bank of Japan has been exceeded, and the first level in 13 years and 11 months, excluding the impact of the consumption tax hike.

10% increase in price after much thought ``Ramune'' company

A company in Shizuoka Prefecture that manufactures and sells carbonated drinks such as ramune has more than 50 employees, and production costs have increased significantly.

Liquid sugar, which is the raw material, is made of corn, and the purchase price has risen by about 30% compared to last year due to the increase in global demand.

In addition, since the cost of electricity and fuel oil required to produce carbonated drinks is also rising, the company has raised the price of about 60 types of products by 10% from April this year.

However, it is said that there were objections from mass retailers and wholesalers, such as "if you want to raise the price, I will switch to other company's products", and employees were forced to respond.

Furthermore, even after somehow raising the price, the supplier contacted us to raise the price of raw materials again due to the influence of Russia's invasion of Ukraine and the depreciation of the yen.

Management will be under pressure if it is not possible to pass it on to the price, but it is said that the company is worried about whether customers will understand it, and the timing and amount of the price increase.

The company is focusing on product development and expansion of sales channels that are not involved in price competition.In addition to producing cider using local specialties for souvenir shops, the United States and Europe For example, we are trying to increase sales by exporting Ramune, a traditional Japanese drink.

Toshiyuki Kimura, Managing Director of Kimura Beverage, said, "Small and medium-sized enterprises cannot survive without creative ingenuity. Instead of continuing the situation where it is difficult to make a profit because they cannot pass on the price, they should generate an appropriate profit and increase the wages of their employees. I want to raise it," he said.

The main reason for the price rise is "energy".

The main factor behind the rise in prices is the increase in energy prices, which increased by 16.2% compared to the same month last year.

Individually,

electricity bills rose by 19.6% and gas bills rose by 18.8%.

Food prices have also risen, with 'food, excluding perishables' rising 3.7%.

Specifically,

"edible oil" increased by 40.3%, "cooking curry" increased by 15%, and "bread" increased by 12.6%.

Teikoku Databank, a private credit research company, conducted a survey of 105 major food and beverage manufacturers in Japan, and summarized the price hikes of each company as of the end of July.

According to this, there are 6305 items of food and beverages that are scheduled to be raised in October this year.

This is about 2.5 times higher than in August.

According to a research company, the range of price increases is also expanding, and it is expected that the burden on household budgets due to price increases will increase further.

"Workman" "No price increase" due to past bitter experience

Under these circumstances, some companies have chosen not to raise prices.

Workman, which sells casual wear and work clothes, made a press release in February stating that they would not raise the prices of their products, as prices were rising.

This is because we wanted customers who are attracted by low prices to shop with peace of mind.

However, even after half a year, the yen's depreciation and rising raw material prices have not abated, and the business environment is becoming increasingly severe, with earnings forecast for the fiscal year ending March 2019 declining for the first time in 13 years.

For this reason, they hold regular meetings to discuss product prices, but they say they cannot easily raise prices.

It is because of past bitter experiences.

In 2014-2015, the company raised prices on its lowest-priced items by as much as 30%.

At that time, the yen was depreciating, so the decision was made in response to that, but the sales of the products whose prices were raised fell by about 70%.

After that, although the price was restored, it took about two years for the sluggish sales to return to normal.

Based on these lessons, at the meeting held in August, we decided not to raise prices for the time being.

Instead, we are reducing costs by reviewing product materials.

For example, our new camping sleeping bag uses a fleece lining that is already on the market.

By ordering more of the same material, it is possible to lower the purchase price.

In addition, we will review the cost in detail, such as making the tag of the product about half the size and wrapping the shoes in a plastic bag instead of individually boxed.

It is calculated that about 10% to 20% of the total cost from purchase to sale can be reduced through these efforts.

Tetsuo Tsuchiya, Senior Managing Director of Workman, said, "We want to keep the price as it is through our own efforts. We are a company that is particular about price and function, so there are some difficulties, but we want to stick to it."

More than 15% of companies “Cost increase cannot be passed on to prices”

In June, a private credit research company Teikoku Databank

asked more than 1,600 companies whether they were able to pass on the increase in purchasing costs to sales prices and service fees.

While 73.3% answered that they have done so,

▽15.3% answered that they have not done so at all.

In addition, even among companies that responded that they were able to pass on costs, the average percentage of increased costs that could be passed on to selling prices was 44.3%, and the amount of actual price increases was less than half. understood.

According to a credit research company, there are cases where management is under pressure because some companies are unable to pass on the price due to concerns about losing customers due to intensifying price competition and not gaining the understanding of business partners. is.

Wage growth “failed to catch up” Real wages for 3 consecutive months↓

Wage growth has not kept pace with inflation.

According to the Ministry of Health, Labor and Welfare's "Monthly Labor Statistics Survey," the total cash earnings per worker in June this year averaged 452,695 yen, an increase of 2.2% compared to the same month last year.

However, reflecting price fluctuations, real wages in June fell 0.4% from the same month last year, marking the third consecutive month of negative growth.

The negative margin was smaller than in May this year, as summer bonuses increased compared to last year.

Rapid increase in consultations such as reviewing household finances nearly doubled from last year

Under these circumstances, the number of users of companies that accept consultations on household finances and asset management has increased, nearly doubling compared to the same period last year.

This company has 9 branches nationwide, and at the counter, you can review your household finances, receive consultations on housing loans and asset management, and receive advice from financial planners.

According to the company, the number of consultations is increasing as prices continue to rise, and in July it was about 900, nearly double the same period last year.

It is said that users are asking for advice such as "How can I reduce the payment of increased utility bills?"

Koichi Oguchi, representative of the Investment Trust Consultation Plaza, said, "In the midst of high prices, there are more and more cases where people are asked if they can do something.

A man in his 40s living in Tokyo visited for consultation on August 10 with his wife and two children.

The man is self-employed and works as a car maintenance worker, but he is worried that his income will decline in the future, as the price of car parts will rise and the number of customers may decrease.

In addition, it is said that he consulted this time because the educational expenses and food expenses for two children aged 5 and 4 are expected to increase in the future.

After receiving a lecture on the current price situation from the advisor in charge, I wrote down the monthly expenses of the family of four and identified the items with the most expenses.

As a result, it was found that the monthly expenditure was about 50,000 yen more than the average for a family of four with two children, and they were advised to review their fixed expenses.

Naoto Masubuchi, 47, who consulted with us, said, "I want to save money for my children, but every time I see news of a price increase, I get worried. I have to think about reducing my spending." rice field.

"I don't want to cut back on my child's spending," her wife said.

Expert "Consumer prices will be close to 3% in the fall"

Naoko Kuga, senior researcher at NLI Research Institute, said, ``The main factor behind the rise in prices has shifted from energy prices to the rise in food prices. As the prices of goods are rising, the burden on household budgets is increasing," he said.

In addition, regarding the outlook for the future, he said, "Because there are still some parts that companies have not yet passed on to their prices, consumer prices will continue to rise, and the rate of increase will reach the upper half of the 2% range, or close to 3%, around autumn. I will.”

Regarding the difference between the rate of increase in the consumer price index and Europe and the United States, "The rate of increase in Europe and the United States is much higher than in Japan, but wages are also rising. In Japan, too, companies will produce high-value-added products and appropriately pass on prices. It is important to create a cycle in which wages also rise."

Regarding what can be done as the burden on household budgets increases due to rising prices, he said, "Recently, there are many subscription-type services that allow you to use only the amount you need when you need it. I want you to review your household finances," he said.

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