[AFP]
[AFP]

Japan's Uniqlo scrapped plans to raise sock prices by nearly 58% after a fierce consumer backlash, in a reversal that highlights growing resistance to price increases for everyday essentials. The company had cited rising raw material and logistics costs and a weak yen as justification, but ran into stiff opposition from shoppers already strained by persistent inflation. The episode reflects a broader shift in Japan's consumer market, where household spending has fallen for nine consecutive months.

According to Bloomberg, Uniqlo canceled a sock price increase and the elimination of bundle discounts that had been scheduled for Nov. 10. The reversal came just 11 days after the company announced the price changes on Oct. 16.

A spokesperson for Fast Retailing, which operates Uniqlo, told Bloomberg the company had reconsidered the planned price adjustments in the Japanese market because socks are an essential everyday product.

The announcement drew an immediate reaction on social media platform X, where complaints piled up. One user wrote that they were working, managing a household and raising children, and asked what more they were supposed to do. Some consumers said they planned to stock up on socks before the price increase took effect.

Four pairs of socks from 990 yen to 1,560 yen ($10) — then the plan was dropped

At the center of the controversy was Uniqlo's popular "50-color socks" line.

Uniqlo had planned to raise the price of a single pair from 290 yen to 390 yen starting Nov. 10 — an increase of 34.5% — while also eliminating the multi-pair bundle discount.

Under the existing pricing, four pairs could be purchased for 990 yen. Without the discount, the same four pairs would have cost 1,560 yen ($10) — an increase of 570 yen, or 57.6%.

Standard socks sold in three-pair bundles for 990 yen were also set to lose their discount, with each pair priced individually at 390 yen, bringing the cost of three pairs to 1,170 yen, an 18.2% increase.

Uniqlo had said the overall price adjustments would raise the average selling price across its product range by about 4%, reflecting higher raw material and logistics costs and increased import expenses from the weak yen.

As consumer complaints spread, the company reversed course. Uniqlo posted a revised notice on its official website on Tuesday, announcing it was canceling both the price increase and the end of bundle discounts for the 50-color socks line.

The 50-color socks will continue to be sold at 290 yen per pair and 990 yen for four pairs. The three-pair bundle discount on standard socks will also remain in place.

Uniqlo apologized to customers for the confusion and inconvenience caused by revising the plan so soon after announcing the price changes.

Price increases on other clothing items will proceed as planned. The "Kando Jacket" for men and women will rise from 6,990 yen to 7,990 yen, an increase of about 14.3%. The "Kando Pants" will go up from 3,990 yen to 4,990 yen, a rise of about 25.1%.

Uniqlo's decision to exempt only socks from the price adjustments reflects the particularly high price resistance consumers show toward frequently purchased everyday necessities.

Japanese sock specialist Tabio had a similar experience. Tabio discontinued bundle sales in 2023 due to rising raw material costs, but resumed discounted sales in February this year after sustained consumer demand.

Japan household spending falls for 9 straight months — 'even middle-income earners are on alert'

Uniqlo's reversal is seen as a sign of shifting dynamics in Japan's consumer market. After decades of deflation, Japanese consumers are accustomed to low and stable prices. While rising labor and raw material costs have increased the burden on companies, attempts to pass those costs on to consumers are meeting stronger resistance.

Japan's consumer price index for September, released by the Ministry of Internal Affairs and Communications on Oct. 23, rose 2.1% from a year earlier. The CPI excluding fresh food also climbed 2.1%.

Sustained inflation is eroding household purchasing power. A household survey by the ministry found that average monthly spending by households of two or more people reached 310,975 yen in August.

Real consumer spending, adjusted for price changes, fell 3.1% from a year earlier — the ninth consecutive month of decline since December last year. In July, real spending had dropped 3.6%, underscoring a sustained trend of households cutting back in response to persistent price increases.

Food spending has been particularly affected. Real expenditure on food fell 1.4% in August from a year earlier, with spending on fish down 6.7%. The ministry said a trend toward frugality driven by price increases was evident in food consumption, and that it would monitor the impact of further price rises on household spending.

The heightened price sensitivity is being observed even among higher-income consumers.

Atsushi Takeda, chief economist at the Itochu Research Institute, told Bloomberg that Uniqlo's decision to reverse the price increase showed the company was acutely aware of consumer resistance. Takeda added that in Japan recently, not only lower-income households but also relatively higher-income consumers have become increasingly alert to price increases.

Uniqlo's decision illustrates the challenge companies face in passing on higher costs while staying within the price range consumers are willing to accept.

Share price up 29%, but consumers are closing their wallets — price competition intensifies across retail

The consumer pullback driven by high inflation is spreading across Japan's retail sector.

Reuters reported Thursday that Japanese consumers are changing their shopping habits, turning to discount supermarkets instead of convenience stores.

Customer traffic at Japanese convenience stores fell for 15 consecutive months through September. In September alone, the number of customers dropped 3.8% from a year earlier.

Discount retailers, by contrast, are drawing more shoppers. Seiyu, a major discount supermarket chain, saw customer numbers at existing stores rise 6.9% in September from a year earlier, with analysts attributing the gain to an expanded lineup of affordable meal options and fresh produce.

Major convenience store operators are responding to the customer exodus. Seven-Eleven and FamilyMart have been expanding their private-label product ranges at lower price points and strengthening promotional strategies that bundle food and drinks at a discount.

As Japanese consumers increasingly prioritize price over brand or convenience, competition among retailers on low pricing is intensifying.

Fast Retailing, Uniqlo's parent company, has nonetheless performed well in the stock market. According to Bloomberg, Fast Retailing's share price rose about 29% from the start of this year through Thursday, outpacing the 17% gain posted by Japan's Topix index over the same period.

The attention drawn by Uniqlo's sock price reversal stems precisely from the contrast between strong equity performance and the growing price burden on consumers.

Companies must reflect higher wages, logistics costs and raw material prices in their selling prices, but weakening household purchasing power is making it harder to determine how much to raise prices and when. For frequently purchased everyday essentials in particular, price changes are felt directly by consumers, and that sensitivity is shaping corporate pricing decisions.

Uniqlo's decision to reverse its sock price increase just 11 days after announcing it is a stark illustration of how Japan's consumer environment is changing. As high inflation persists, the tug-of-war between companies and consumers over the price of everyday necessities is expected to continue.


rainbow@heraldcorp.com