Clothes, electric toothbrushes, refrigerators and washing machines are selling like hotcakes in Japan as consumers race to dish out money on a last-minute shopping sprees before the impending tax hike makes a dent in their savings.
Consumer spending was predicted to surge ahead of the consumption tax increase to 8 percent from 5 percent but figures showed otherwise, with household spending plunging 1.5 percent in February from a year earlier.
But this doesn’t mean Japanese consumers have stopped spending.
Fumie Takeuchi, a salon owner, reportedly splurged 3 million yen ($37,000) on jewelry at one go to ahead of the tax hike that starts April 1.
“I had long been eyeing a certain black diamond ring but hesitated because it was rather expensive,” said Takeuchi, 57. She added she swiftly decided to buy the ring after a saleswoman reminded her of the imminent increase in prices.
Reiko Oguma, a housewife living in Tokyo, said she shelled out $2,000 for a new refrigerator and clothes ahead of the Japanese sales tax increase.
“I know that stuff is cheaper than it will be afterwards so I’d rather buy it now,” said Oguma.
Electronics chain Bic Camera logged a 14 percent increase in sales last month as demand for products shot up while they were still cheap.
“We’re seeing rush demand ahead of the tax increase,” said a spokesman for the company.
Some companies are absorbing the higher tax to keep prices steady amid concerns of a drop in sales. However, others said prices will go up to meet the new tax rate.
QB House, a 1,000 yen-a-head haircut salon, said prices will increase to 1,080 yen. The company insisted that it kept its thrifty rates capped despite the last tax rise 17 years ago from 3 percent to 5 percent.
“Under the current circumstances, it is hard to keep prices the same,” the firm said.
Restaurant chain Yoshinoya also said its price for its basic beef-on-rice bowl will go up to 300 yen from 280 yen.
By Maesie Bertumen
Image: “Shopping Osaka Japan” by IvanWalsh.com/Flickr