Uniqlo reverses sock price increase

Uniqlo, the flagship brand of Fast Retailing, has abandoned a planned price increase on its socks in Japan, reversing its decision less than two weeks after initially announcing the change.

Reason for reversing the decision

The company had planned to raise the price of its basic colored socks to 390 yen (2.22 euros) per pair, up from 290 yen (1.65 euros) previously, while also ending the promotional price for multiple pairs purchased. The decision to abandon the price increase was made in response to public reaction in a country affected by persistent inflation.

Uniqlo maintains promotional pricing

Uniqlo indicated on Tuesday that the price increase was officially abandoned, and it would maintain the advantageous price of 990 yen for four pairs of socks. A spokesperson for Fast Retailing stated that since socks are an essential item of daily life, the company had reconsidered its planned price revision in Japan and decided to maintain its offer for the purchase of four items.

Other products still face price hikes

The company will continue with price increases for other selected products, including jackets and pants, mainly due to the surge in production and transportation costs and the weakness of the yen. Japanese households are facing a sharp rise in prices affecting all aspects of daily life, from eggs and vegetables to transportation, in contrast to the deflation that had affected the country for several decades.

Inflation pressures in Japan

Consumer prices in Japan increased by 2.1% on an annual basis in September, and inflation, exacerbated by the surge in oil prices since spring, has led the central bank to tighten its rates. Atsushi Takeda, chief economist at Itochu Research Institute at Bloomberg, stated that the fact that Uniqlo decided not to implement the price increase suggests that the company was very aware of consumer resistance to higher prices.

Broader economic challenges

Many companies once proud of offering low prices now have to increase them, risking destabilizing their customer base. The popular restaurant chain Saizeria apologized to its customers upon announcing a price increase this month. Takeda explained that it is no longer only low-income consumers who feel the pressure, but consumers with slightly higher incomes are also becoming increasingly wary of rising prices.

Government efforts to ease burden

Japanese companies are able to pass on part of the cost increase to consumers, but not enough to fully cover them. The government of Prime Minister Sanae Takaichi is trying to cushion the impact on purchasing power, with large energy subsidies among other measures.