'Price killers' cut through Japan's shops: Hard sell replaces 'honourable patronage'
Wednesday 28 April 1993
The language of shopping in Tokyo used to be genteel, enunciated in polite, high-pitched Japanese by white-gloved elevator ladies conveying customers from one floor to the next in the posh, long-established department stores. But in these recessionary days the politeness is disappearing. It is being replaced by the brusque staccato of street salesmen with portable loudspeakers pushing cut-price goods at passers-by.
Consumer spending accounts for 60 per cent of Japan's economy, but despite emergency stimulus budgets from the government, consumers are still slow to splash out. Last month, sales of large retailers declined by 7.5 per cent, continuing a long downward trend, according to figures released yesterday by the Ministry of International Trade and Industry.
Much to the government's frustration, Japanese citizens still have not shed that irritating habit of saving, particularly when times are rough - a habit, ironically, that was originally encouraged by the government after the Second World War. When they do go shopping, it is no longer for prestige goods with prestige price tags: discount stores are the current rage.
It is the era of the 'Price Destroyer' and the 'Category: Killer', as Japan's press, borrowing from Hollywood, has dubbed the new trend towards discount shopping. The smart shopping districts of Ginza and Aoyama in Tokyo are looking relatively deserted. Instead, people are flocking to areas like Kanda, Okachimachi, Ueno and Shinjuku where discount shops boast reductions of up to 70 per cent.
Consumers have finally woken up to what Western trade negotiators have been saying for years: normal retail prices in Japan are an enormous rip-off, supporting a parasitic wholesale and distribution network. On top of that is an almost immoral policy of price-rigging by big manufacturers who have been able to dictate to their retail outlets how much they must charge their customers, with the implicit threat to stop supplies if prices are lowered.
New discount shops are springing up in the cities to challenge this by 'destroying prices'. Magazines, which until recently ran lists of exclusive restaurants and fashionable art galleries, now run regular features on where the latest bargains can be found in cheap clothes or electronic goods. The yen may be appreciating on world markets, but at home the consumer is going down-market.
Discount shops, which sell everything from designer goods to food, cosmetics and cameras, use several tactics for cutting prices. Some defy the manufacturers' recommended retail prices by buying from other retailers with swollen stocks. Others cut out the wholesaler by buying in bulk from the manufacturer. Foreign goods like Scotch, perfumes or leather goods are being discounted through 'parallel importing', where companies circumvent appointed distribution agents - and their guaranteed percentage take - by importing from Hong Kong or Singapore.
The discount boom has even spread to foreign travel: these days 'bucket tickets' can be bought nearly as cheaply in Tokyo as in Bangkok or Hong Kong, Asia's traditional cheap-ticket locations. But although travel agents are able to wrangle cheap tickets to overseas destinations by fiddling the package-tour regulations, domestic air travel is still highly regulated.
Inevitably, as discount shops boom, other stores are going out of business. The 'honourable patronage' of overpriced shops is falling victim as Japanese shoppers rejoin the real world.
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