Japanese supermarkets are confronting a rising cost of living crisis as inflation sharply increases prices on everyday essentials, forcing many consumers to cut back on spending. Despite Japan’s headline inflation rate standing at 1.9 percent, the prices of staple foods have surged significantly. Tuna costs have risen nearly 25 percent, cabbage prices are up 45 percent, and green tea has increased by 31.5 percent. Although rice prices have declined somewhat from earlier this year, they remain considerably above comfortable levels for many shoppers.

This year, approximately 20,000 food and beverage products are expected to see price hikes, prompting consumers to substitute more expensive items with cheaper alternatives. The ongoing conflict in Iran has exacerbated costs by driving up packaging expenses. One notable example includes Calbee, a snack manufacturer, which temporarily switched to black and white crisp packets during the summer due to rising material costs and supply difficulties.

Household responses to these pressures vary. Many consumers are shifting from meat and fish to less costly proteins such as tofu and eggs, reducing dining out, and cutting back on discretionary purchases. Surveys indicate that nearly half of the parents using children’s meal support services have reduced fruit and vegetable consumption, with 92 percent expressing concerns about their children’s nutrition. Other reported coping strategies include minimizing air conditioning use during summer heat, skipping meals, and opting for cheaper carbohydrates like pasta and noodles instead of rice. Pensioners are traveling greater distances to access more affordable supermarkets, and some shoppers wait for evening markdowns to purchase groceries.

The government, led by Prime Minister Sanae Takaichi, who secured a landslide victory in February, has emphasized addressing the rising cost of living as a top priority. Takaichi’s administration is undertaking substantial investments in areas such as food security, semiconductors, and artificial intelligence. However, wage and pension growth have yet to keep pace with surging prices, especially for basic necessities, housing, and rent.

The weak yen has played a significant role in increasing import costs, contributing to inflation. In July, the yen hit a 40-year low against the U.S. dollar, leading to a rare joint intervention by U.S. and Japanese authorities to stabilize the currency. The intervention’s effects were fleeting, and shortly after the Bank of Japan raised interest rates to 1.25 percent—a 31-year high—the yen declined further as market participants anticipated a gradual pace of future rate hikes.

While the weak yen has made imports more expensive for Japanese consumers, it has been advantageous for foreign tourists, prompting some businesses to introduce dual pricing. For instance, a seafood buffet in Tokyo and Himeji Castle have both implemented domestic discounts or higher charges for visitors from outside their local areas. Japan’s Agency for Cultural Affairs is now considering extending dual pricing to national museums and galleries to cover multilingual support costs. Early results suggest these measures reduce visitor numbers but increase revenues, addressing concerns over overtourism.

The economic pressures have also motivated some Japanese workers, including recent graduates, to seek employment overseas where wages are higher. Despite low official unemployment rates around 2.4 percent, young people face obstacles due to high living costs and relatively low starting salaries compared with countries like Australia. While some migrants express regret and long for home, the gradual rise in Japanese permanent residents abroad has raised concerns about a potential brain drain.

Takaichi’s government has proposed an ambitious 15-year investment plan totaling £1.7 trillion, blending public and private funds to revitalize the economy. However, critics warn that Japan’s already high public debt, near 200 percent of GDP, could be exacerbated by these spending plans. A specific point of contention is the planned reduction of the consumption tax on food from 8 percent to 1 percent for two years starting in April 2025. Detractors argue this temporary measure lacks targeting for those most in need and sets up a challenging tax increase in 2029 unless significant economic improvements occur.

Political momentum behind Takaichi appears to be waning as voters grow impatient with ongoing economic difficulties. With her party leadership term set to expire next year, her prospects for re-election depend in large part on reversing the prevailing sense of insecurity felt by many Japanese consumers grappling with inflation at the supermarket checkout.