JAPAN NEWS



 

 
Food prices continue to rise, driven primarily by high raw material costs, as well as increasing logistics and labor costs, leading to predictions of repeated further price hikes going forward.

Food prices, initially pushed up due to changing international conditions, are continuing to rise because of growing domestic operational costs.



Red ink dilemma

“It’s a rush of price hikes. Everything is going up in price. There’s nothing I can do but lament it,” said a 79-year-old housewife as she finished her shopping at a Sanyo supermarket in Adachi Ward, Tokyo, on Thursday. She let out a sigh while holding her receipt.

Since September, the store has been continuously raising the prices of bottled beverages, chocolate snacks and other items.

The supermarket has implemented measures to prevent customer attrition, such as bringing in low-priced brand products. Many items, however, are continuing to get more expensive.

“If we don’t raise prices, we will end up in the red,” admitted Yoshikuni Abe, a director of the company that operates the store.

According to the nationwide consumer price index for September released by the Internal Affairs and Communications Ministry on Friday, the core index, excluding volatile food prices, rose 2.9% from the same month a year earlier.

Food, excluding perishable items, saw a particularly high increase of 7.6%.
Rice prices rose 49.2%, falling 2.5% from their peak in June but remaining roughly double the 2020 level. Significant price increases were also seen for eggs, up 15.2%; coffee beans, up 64.1%; and chocolate, up 50.9%.



Shifting reasons

According to Teikoku Databank Ltd., the number of food and beverage items undergoing price revisions in 2025 is projected to reach 20,381 items, 60% increase from last year.

However, the causes of the price increases are changing.

A food manufacturer said that international factors were the main reasons for the price increase until the first half of 2024. These factors included the surge in crude oil and wheat prices triggered by Russia’s aggression against Ukraine and the rapid depreciation of the yen.

Since the beginning of this year, however, the majority of companies have cited domestic factors such as rising logistics costs and labor expenses, in addition to higher raw material costs, as their reasons for raising prices.

Households are strengthening their penny-pinching mindset. According to the August household survey, households with two or more members spent an average of ¥102,443 on food per month.

Looking at nominal values for food expenditures, based on unadjusted amounts, the figure rose 5.9% year-on-year. However, when adjusted for price fluctuations, the figure, on a real basis, decreased by 1.2%.

This indicates that consumers are responding to the price hikes by reducing the amounts of food they purchase or switching to cheaper products.

Yoshiki Shinke of the Dai-ichi Life Research Institute Inc. suggested that price increases will likely continue, saying, “With food manufacturers successively raising prices, adjusting prices now will not draw much attention and won’t significantly impact market share.”