While the decision to proceed has not yet been finalised, in less than 11 months, Japanese consumers may very well be looking at yet another mark-up in the consumption tax rate, from the current 8% to 10%. The Nikkei Marketing Journal (1 April) surveyed 1,000 adults via the Internet to ask about their kakekomi yosan (last-minute rush budget) for outlays ahead of the tax rate increase.
In contrast with the 2013 survey—conducted ahead of the last rise (from 5% to 8%), and in which 21.1% of respondents said they planned to spend “up to ¥50,000”—this poll shows 46% of participants have planned minor splurges.
While 68.1% of the sample said they did not anticipate any changes in their spending patterns ahead of the tax rate hike, 25.5% revealed that they did plan more outlays. Some 6.4% said they would reduce expenditures.
Possible outlays should not be disregarded. Data on mass merchandisers collected by the Ministry of Economy, Trade and Industry prior to the 2014 rise estimate that the total outlays by consumers over the January–March period reached ¥1.4trn. This total is 1.4-fold larger than the outlays for the same period a year later.
One figure almost unchanged from the time of the previous rate hike is the percentage of those who said they expected to “restrain spending”. (The previous figure was 92%; this time it is 91%.) When asked in what ways this restraint might be achieved, the two most popular replies given (both at 62%)—with multiple replies accepted—were “to shop at stores offering lower prices” and “to reduce expenditures for eating out and travel”. Some 20% more people gave the latter two answers than in the 2014 survey.
The Nikkei Marketing Journal’s analysis considers the scenario of higher prices with no accompanying wage boost. Some 31% of the respondents said they expect their wages for 2017 to decline from the year before, while only 15% expected them to grow. A survey on household consumption, conducted by the Ministry of Internal Affairs and Communications, reveals that over the past three years, average monthly income had stagnated. However, as a result of the 2014 rise in the rate of consumption tax, the cost of living, particularly in terms of food items, has continued to increase.
How will you economise?
(In descending order of popularity)
1. Shop at stores offering lower prices
2. Reduce expenditures for dining out and travel
3. Refrain from impulse buying
4. Buy more during special sales or limited-time sales
5. Cut back on mobile phone use
6. Make larger purchases during sales
7. Seek a discount plan for electric power use
8. Take a positive approach to buying comparatively cheaper private brands
9. Give more consideration to price comparison
10. Buy more items that issue redeemable points
11. Use more discount coupons
12. Use products or services less often
13. Purchase cheaper product grades, such as happoshu (sparkling malt beverages) instead of beer
Source: Internet survey of 1,000 adults conducted by Macromil in March 2016