The Real Housewives of Japan

[Rajiv]

The Real Housewives of Japan: Shopping for Bargains … Driving Deflation?

Could 70,000 Japanese housewives tip this Asian giant into a deflationary spiral?

As farfetched as that sounds, it's become a major cause for concern in this nation of 128 million, which has been in an economic funk for two decades. These "real housewives" are part of a user-driven, social-networking site called Mainichi Tokubai, which delivers the best prices on specific grocery-store items to the fingertips of Tokyo-region consumers.

To hear frustrated Japanese policymakers and retail executives tell it, these bargain-minded consumers and their equally frugal social-networking site is almost-single-handedly undercutting the Japan's economy.

"We understand consumers want the best deals," Japan Chain Stores Association executive Shoichi Ogasawara groused to CNN's Kyung Lah. "And we understand that the social-networking site is a natural extension of consumer behavior in the Information Age. But supermarket prices have fallen for 13 years in a row in Japan," and sites such as this are making it difficult to reverse that trend.

Don't make the mistake of believing that something similar couldn't happen here in the U.S. market. Given that Japan's consumer technology tends to be anywhere from 18 months to two years ahead of U.S trends, this could be a preview of what's to come for the badly troubled U.S. economy.

I do not believe that this is bad. Yes this will change the status quo, but ultimately
for the better -- Any path to a sustainable economy that is resource constrained, has to be deflationary by necessity!

[BiscayneSunrise]

Re: The Real Housewives of Japan

Sounds like the same complaints against Wal Mart

[jk]

Re: The Real Housewives of Japan

last i knew, the japanese retail system was burdened by way too many stores and high prices.

[mooncliff]

Re: The Real Housewives of Japan

Yes, there is HUGE deflation happening now in Tokyo, especially in the last two years.

Except inside the Yamanote Line, rents have dropped 15 to 30%, but even downtown, our office moved across the street to a comparable building, and the rent is now half. One of my friends renewed his lease in a pretty expensive expat apartment and told the landlord "drop the rent 15% or I'm moving", and they did so with no questions asked.

The prices of everyday goods and food in Japan is really hard to gauge.

When visitors come, there is the distortion of the exchange rate. When people from the UK came two years ago, they couldn't believe how cheap things were, but that was at 1 GBP being equal to 220 yen, whereas now it is 130 yen, effectively nearly doubling prices in pounds.

Tourists see the shops in Ginza and Shinjuku, especially the department stores like Mitsukoshi and the food stores in the basements. This is like shopping in Manhattan, where prices made me blanch in 2006 (the sushi was half the quality and double the price). Even Jared Diamond marveled at the $200 dollar a pound Kobe beef. I can assure him that people do not eat that regularly. All you can eat shabushabu or sukiyaki in a restaurant for an hour and a half is 2,000 yen including tax and there is no tipping in Japan (about $24; 2,000 yen being equivalent to about 2 hours of minimum wage work). I sometimes go to a department store at closing time when the prepared food is 1/3 to 1/2 off because I am in a rush, but even then, it is much more expensive than at a suburban supermarket 20 minutes by train from downtown Tokyo.
Therefore, tourists are often seeing only a small part of daily life in Japan but assuming that all of Japan is like that. This is like going to Beverly Hills or Manhattan and assuming that the entire US is like that.

You do not need a car, which in the US the AAA says costs say $8,000 dollars a year new per year. Even if you keep a cheap car until it dies, you are still talking about 3k per year for the cost of the car plus financing, insurance, maintenance, gas, etc., and I have never been able to get away with less than 5k per year in the US.
Your train pass is free, paid for by your employer.
Young people don't want cars anymore, and sales of new cars in Japan have dropped to 1980 levels.

You don't even need a car to go to Costco. They will ship a box up to 60 pounds anywhere in Japan and deliver in 2 days for about 600 yen ($7).

The layout of stations is in the way that Kunstler would approve. I get off at my station and there is a huge 24 hour supermarket one minute away on the way home, and another 5 minute walk and I am home, so I just pick up food daily.

I'm looking at the ads for a local supermarket, and here are examples of prices.
I tried copying the links, but only get a blank javascript, so if you want to see an example of a typical supermarket ad, click on this, click on one of the red links in the second column, scroll down, and click on the ad, which is identical to the paper copy I am looking at.
http://www.lifecorp.jp/CGI/store/sho...area_cd=03#130
You will see, for example
bananas $1.50 a hand
small flower bouquet for the altar $4
nice trays of sushi for $3 to $12
boneless fresh chicken thighs $4 a pound (but you can get this for half off every day at closing time)
white sugar 50 cents a pound
eggs $1 for 10
fresh spinach $1 a bunch
broccoli $1 a head
loaf of bread $1.5
head of cabbage $1
This is a standard national supermarket chain

The median household income in Tokyo is about $60,000, I think.
http://www.stat.go.jp/english/data/handbook/c13cont.htm

What I am getting at here is that things may (or may not) seem nominally expensive, but given that I do not have a car and do not pay for transportation, essentially, compared to having to go to work by car, one can pick up say $30 of food per day in a few minutes on the way home, and it will be free.
When you go to Costco or the supermarket in the US, if you are forced to have a car to do so, you must factor in that cost to the prices you see.

Another huge deflationary pressure is building because there is a whole system of vastly improved energy efficient appliances now coming on the market.
Say a family of 4 living in a single family dwelling typically uses
$100 a month for natural gas for cooking and water heating
$200 a month for electricity
The electrification plans for residences suggest the following.
1. Discontinue gas use and cook with inductive heating and use a heat pump for hot water. Gas bill will therefor go to 0.
2. As appliances age, replace with energy efficient ones. Superefficient heat pump water heaters will produce hot water for a family for $14 a month using smartmetering (as opposed to the $80 a month using natural gas); 46" LED TVs use about 120 watts; air conditioners/heat pumps down to about 200 watts; IH cooking about half the energy; LED lights (which have dropped to $25 dollars for top of the line Panasonic EVERLED, will drop to about $15 by next year) use about 90% less energy (my 5 incandescent bulbs have been replaced with 5 LEDs, and so electricity use went from 300 watts to 35). Doing this will drop electric bill from $200 a month to say $100.

So at this point, with really low tech changes, the annual energy bill goes from $3,600 per year to $1,200 per year.

One therefore would need a much smaller photovoltaic system to cancel that and make it the house essentially zero net energy. Say a $15,000 system would be adequate. Prices are dropping fast, so I wouldnt be surprised to see $10,000 systems in a few years. Japan has already passed grid parity, so this is actually economically feasible now. I know people who have done this in Japan.

I expect another wave of deflation to wash over Japan over the next couple of years.

[mooncliff]

Re: The Real Housewives of Japan

Here is the website, Mainichi Tokubai (Daily Specials), 毎日特売

(The symbol 円 after the prices is the yen sign.)

run through google translate

http://translate.google.com/translat...n&hl=&ie=UTF-8

[ThePythonicCow]

Re: The Real Housewives of Japan

Thanks for the updates, mooncliff. Good stuff. Interesting.

[c1ue]

Re: The Real Housewives of Japan

So at this point, with really low tech changes, the annual energy bill goes from $3,600 per year to $1,200 per year.

Except you're leaving out that fact that most Japanese don't use air conditioning.

The seemingly low energy bills are due to this.

When I worked in Japan, I did use my air conditioning (set for 26 degrees Celsius) and regularly paid $500/month and over $4000/year. This was 10 years ago.

Today I also don't use air conditioning, though I do use heating a few days in the winter thus my power usage is primarily cooking/water heating/lighting.

My power bill is under $1000 a year now.

As for food, as a resident inside the Yamanote line the prices were quite high.

This is certainly at least partly a function of real estate.

The ad prices you mention are realistic (of course), but also represent SALE prices, not normal prices.

It would be like comparing with a Safeway ad - they don't mention the regular stuff.

A straight non-sale comparison of fruit would show that generally prices are far higher in Japan still - though I would note that the quality in Japan is far higher. The same would apply to non-aquatic meat and produce.

The only things in Japan that were cheaper when I lived there, and still are from my forays every 18 months or so (last less than 6 months ago) are: cigarettes, brand name wines, and fish.