Japanese Retailers Expand Private-Label Offerings in Response to Inflation

Amid rising inflation, Japanese retailers are increasingly focusing on developing their own-brand products to attract consumers who are feeling the financial pinch. With significant price hikes looming for over 4,200 items from leading food manufacturers--covering essentials such as cooking oil, beer, and processed meats--retailers are seeking to provide cost-effective alternatives.

Private-label products, which are created in collaboration with manufacturers, typically come with lower price tags than their branded counterparts. This cost advantage is largely due to reduced spending on advertising and promotional activities. For instance, Aeon, one of Japan's largest retail chains, recently introduced three new products priced at ¥321 (approximately $2.20) each. Among these is a frozen bento meal featuring peperoncino pasta and a hamburger steak with tomato sauce. Additionally, Aeon has announced price reductions on 75 items within its Topvalu private-label range, with cuts ranging from 4% to 21%. A notable example includes a 900-gram bottle of cooking oil, which will be available for ¥246, down from ¥257.

In a similar vein, Ito-Yokado, another major supermarket chain, has increased its range of private-label products under the brand name Seven the Price by 10%. This collection includes a ¥321 package of gyoza dumplings made from leftover cabbage and gyoza skins. Furthermore, the retailer has streamlined packaging for its 750-gram dashi soup stock to reduce costs, resulting in a retail price of ¥645.

According to an official from Ito-Yokado, these private-label items are priced 10% to 20% lower than comparable branded products, making them an attractive option for budget-conscious consumers. Meanwhile, convenience store chain Lawson has revitalized its own-brand product line for the first time in five years. This refresh aims to enhance the appeal of items such as onigiri rice balls and desserts through redesigned packaging.

As consumer prices continue to rise, the demand for private-label products is expected to increase. A representative from Lawson noted that when the consumer price index escalates, consumers tend to shift towards purchasing more private-label options, indicating a growing expectation for these products.