Starting tomorrow, Japan’s humble 100 yen shops – the Japanese equivalent of a “Dollar Store” – will have to start stocking cash registers with an additional supply of 1 yen coins. Since 1997, Japan’s 5 percent consumption tax made each item a nice, round 105 yen. With the April 1 tax hike, to 8 percent, increasing that number to 108, the much loathed aluminum ichi-en will be filling coin purses across the country.
While an additional three yen for every 100 might not amount to much at the local Daiso, big purchases are set to become significantly more expensive. Ahead of Tuesday’s consumption tax increase, many Japanese shoppers found an excuse to splurge on items they might have otherwise foregone for a while longer.
One Japanese housewife, surnamed Oguma, told The Japan Times about her decision to pull the trigger on a 200,000 yen ($1,945) refrigerator and some new clothes.Enjoying this article? Click here to subscribe for full access. Just $5 a month.
“I know that stuff is cheaper than it will be afterward so I’d rather buy it now,” she said.
A representative from Bic Camera, one of Japan’s largest national electronics stores, confirmed that family-sized refrigerators, washing machines and electric toothbrushes were in high demand ahead of April 1. The company claimed a 14 percent year-over-year increase in February sales – despite above-average snowfall across much of Japan that kept many people indoors.
The Sunshine City shopping district in Ikebukuro, central Tokyo, was flooded with last-minute deals over the weekend. Workers holding “Time Sale” signs and shouting out deals through bullhorns beckoned customers, quick to point out that it was the last weekend to take advantage of the pre-tax hike savings.
Uniqlo, a discount fashion retailer, was offering a range of discounts on Sunday. The company decided to change its price tags last month – which have always reflected a tax-inclusive total cost.
“The hope is that Uniqlo will be able to pass along the cost of the tax increase to customers without creating the impression that it is raising the price of the merchandise itself,” wrote Nikkei.
Among the other common products and services that will cost more starting tomorrow: vending machine beverages from Asahi and Suntory, ice cream from Glico and haircuts at QB House (the 1,000-yen, 10 minute haircuts popular with Japanese salarymen will now cost 1,080).
Investors also initiated a gold rush over the weekend, hoping to reap short-term profits by purchasing the precious metal ahead of the 3 percent jump in prices. The retail price of gold fell to 4,590 yen per gram this week, down from 4,769 on March 14.
A spokesperson for Tanaka Kikinzoku said that approximately 200 people a day have been coming to the jeweler’s flagship store in Ginza to buy gold – 500 gram ingots sell for 2.3 million yen ($22,360).
It remains to be seen if Japan’s tax hike will derail Abenomics and leave stores empty. But with Prime Minister Shinzo Abe’s plan to increase the sales tax again, to 10 percent in 2015, it’s never too early to plan ahead.