Consumers are going from acclimatizing to price increases to becoming apathetic to them: They are growing increasingly tired of tightening their purse strings ~ Consumer Snapshot Vol. 9

1. Introduction: Taking in one’s surrounds on a daily basis

It‘s already mid-November, and we are moving further into Autumn.
I visit Ikuta Ryokuchi Park every weekend by bicycle, and I can feel the trees are changing preparing for autumn. This year, the leaves are starting to change to their typical autumn red hue later than usual, and while the metasequoia leaves are just starting to turn a deep green, it seems like it will probably be another month before they fall and the brown leaves cover the ground like a carpet.

Nature is not the only thing we can enjoy taking in the same surrounds with every week, every month, and every year.
Around this time last year (in around November), I wrote an article here that introduced the psychology of people becoming less resistant to price increases due to the repeated price increases for a variety of products and services, using the term “acclimatizing to price increases”. I also introduced the psychology of having become fatigued by economizing behavior to combat these price increases, such as searching for the most reasonable items possible, and using points and coupons to reduce one’s expenditure in life using the term “growing tired of economizing”.
In this article, I would like to take in data from our fixed-point survey from the perspective of how consumer’s mindset on consumption has changed a year on.

2. Consumers desire to act is recovering, but this is nuanced by caution below the surface

Let’s take a look at covid infection anxiety and behavioral anxiety from our usual fixed-point survey (Fig 1).
The spread of covid infections is cyclical, with infections also spreading in the summertime. Infection anxiety, which increased with the growth of infections is also sizably decreasing with the decline in infections. However, we aren’t in a completely reassuring situation, and every year, the number of infections tends to increase towards the end of the year and the new year, so it seems like our current anxiety levels are a momentary respite. We intend to continue to monitor future developments.

Fig 1

With behavioral anxiety as well, along with the decrease in infection anxiety, each of the indices tends to decrease, with behavioral anxiety at its lowest level ever. “Eating at restaurants” and “Domestic travel” perhaps due to experience to date are at a low close to 20%, indicating consumers do not have that much anxiety about this due to them taking infection countermeasures, and the places they go to and stores also taking infection countermeasures. On the other hand, consumers have some anxiety about “going out to places where people gather, such as theme parks and downtown areas” due to the contact with large numbers of people and the limits to infection countermeasures. In addition, there are also outbreaks not only on covid, but mycoplasma pneumonia, and many people are still keeping up basic infection countermeasures like wearing masks, frequently washing their hands and gargling, indicating people are still conscious of “protecting themselves”.
There are loads of events coming up, with the autumn travel season, as well as Christmas, and the end of year/new year, so people want to enjoy theses while taking infection countermeasures suited to the situations they are in.

Next, let’s take a look at mindsets regarding consumption.
Consciousness of economizing remains high as usual at just under 70%. Since June, it has been on a slight downward trend, but has recently started to increase. In addition, expectations of a recovery in living standards are also on an upward trend, with just under 40% responding “I don’t think so”, with this survey result not that encouraging a sign. (Fig 2).

Fig 2

3. Increasing income is not creating leeway/extra pocket money

Over the past few years, the government has been working to ensure companies increase incomes through slogans like increasing salaries and take-home pay. But what has been the actual experience of consumers?

22% of “people who earn income in some way” responded that “My income increased this year” (Fig 3). Conversely, 10% responded it “Decreased”, so it increased among a greater number of people than it decreased with. In addition, approximately 60% noted it “Remained unchanged”, so it appears that “one in five people” among the general public feel their income has increased. This trend has not changed sizably from the survey conducted at the same time last year.

Fig 3

On observation by age group and gender, around 30% of males in their teens to 40s, led by males in their 20s (34%) felt their income had increased. Conversely among females, this was highest among females in their teens (38%), with around 30% of females in their 20s, 40s, and 30s feeling their income had increased. Among both men and women, the young and middle aged appear to feel their incomes have increased, while seniors seem to feel this less.

Upon asking why their incomes had increased, among the Total, around 60% noted their “basic salary (56%)” had increased (Fig 4). This was followed by “bonuses (23%)”, suggesting that government-lead initiatives and corporate efforts have driven this increase in income. With “hourly wages (30%)”, there have been ongoing increases in the minimum wage, and it appears that the treatment of part-time and casual workers is improving to an extent.

Fig 4

On observation by age group, “income from flea markets etc.” is conspicuous among young people. Young people recently appear to increasingly “think about whether items can be resold at flea markets etc. when they no longer need them” when shopping, with this trend appearing to be present in the background here. In addition, on observation of “investment in stocks and asset management”, seniors continue to tend to be as active here as they have been in the past, although among males, figures are high among those in their teens and 20s too. This is also likely due to the fact that young people are concerned about their retirements and are resultantly more conscious of saving and investing, and that flea market apps and credit card companies are increasingly deploying services that enable consumers to invest with points, making investment even more familiar to them.

While one in five people responded that their income had increased, let’s also take a look at their disposable funds (pocket money). A mere 9% of the Total responded that their disposable funds (pocket money) had “increased”, while 15% noted it had “decreased”, exceeding the people among whom in “increased” (Fig 5).

Fig 5

On observation by age group/gender, “increased” exceeded “decreased” only among males in their teens, 20s, and 30s, and only among females in their teens. Even if some people’s salaries increased, this does not necessarily mean that they have more disposable funds, with it ending up being used for household expenses like groceries, so is not tending to go on to increase disposable funds. In addition, many teenage students earn pocket money through casual jobs, and the increase in hourly wages due to the minimum wage hike has increased their income, and since they live with their parents, this increase in income is deemed directly tied to their increase in pocket money. Furthermore, since many men in their 20s and 30s are still unmarried and live with their parents, this increase in income is likely to fatten up their own wallets.

4. Consumers are going from acclimatizing to price increases to becoming apathetic to them. They are also growing even more tired of economizing

Price increases with everyday products and services have become so cyclic of late that rather than feeling “Oh, prices have gone up again”, it feels more like “Everything is more expensive these days”. When questioned again “Do you feel like you have acclimatized to price increases?”, 47% of people responded “Yes (I’ve acclimatized to it)”, some 16 points higher than “No (31%)” (Fig 6).

Fig 6

Compared to last year, “I’ve acclimatized to price increases” has increased by 6 points. At this point we may have gone beyond “acclimatizing to price increases” and now of the sentiment we are now “apathetic” to this. This same tendency is apparent on observation by age group and gender as well, although women, who are often the ones left to do the daily shopping and manage household finance seem to more often feel “acclimatized to price increases”.

Efforts to maintain household budgets and to economize are also shifting to long-term mode in order to combat the ongoing price hikes.
With consciousness of economizing, 59％ of people responded that their awareness had “increased”, while 35% responded that it had “remained unchanged”, and a mere 2% responded that it had “decreased”, indicating that many people feel that their consciousness of economizing has increased. The tendency for “consciousness of economizing to have increased” is particularly high among women, along with the feeling of having acclimatized to price increases (Fig 7).

Fig 7

We often hear people say “wage increases are not keeping up with the level of price increases”, and upon taking this in along with the perceptions regarding increases to income mentioned a moment ago, this resonates all the more.

Upon asking “Do you feel tired about economizing?” this time once again, 44% of people responded “Yes (I feel tired)”, 20 points higher than “No (I don’t feel tired) (24%)”. This tendency is particularly apparent among females, with females in their 30s rating a high 57% (Fig 8).

Fig 8

In the recent House of Representatives election, “financial countermeasures and economic recovery” were important issues when considering which candidate or party to vote for. We hope for a more tangible increase in income and take-home pay.

We also asked about what specific changes are starting to occur in shopping behavior due to “growing tired of economizing” (Fig 9).

Fig 9

The top answer among both men and women was “Searching for cheap things has become a hassle”, far ahead of the other responses. This was followed by “Searching for cheap stores has become a hassle”, suggesting that it has become a hassle to look for products and stores that are even slightly cheaper. It is also apparent that people have less awareness of dealing with this, and are less willing to “target time sales”, or utilize “points” or “coupons” than before. This tendency appears to be particularly common among young people. Until now, coupons, points etc. were appealing sales measures with price rises by manufacturers or stores, but they appear to be less appealing than before when their sense of being good value and the time and effort this takes are weighed up.

In addition, women, who have grown particularly tired of economizing, rated highly on currently buying “expensive confectionary and desserts” and “expensive side dishes and ready to eat foods”, akin to last time. When people need to tighten their purse strings for too long, they may feel that “it’s ok since I aways do my best to economize” or “it’s ok once in a while”. Compared to last time, there was a conspicuous jump in scores among females in their 20s and 30s.
Among males, “I now enjoy expensive meals out” appears to have increased. There was a sizably jump here among men in their teens, 20s, and 60s, with “eating out” referring here to increased opportunities to eat out with friends, as well as among those in their 20s and 60s to opportunities to drink alcohol as well.

5. To wrap up

In this article, we focused on consumers “mindsets regarding consumption” amidst prolonged price hikes, and took in their outlooks regarding these price rises and economizing. We conducted a survey at a similar time last year, and derived keywords such as “acclimatizing to price increases” and “growing tired of economizing” to discuss the current state of affairs with. A year since then, we are seeing a recovery in the movement of people and goods as we move beyond covid, with inbound consumption also recovering, albeit not to the extent of pre-covid yet. These trends are boosting corporate performance, and appears to be driving increases in regular salaries and bonuses, especially at large companies. In addition, there has also been active discussion regarding how to support household expenses, such as making school lunches, medical car, and educational costs free as a way to support child rearing, and such systems are also becoming increasingly common.
Despite these trends, we are far off seeing “increases in income in line with price increase”, and people appear to still be clinging to a consciousness of economizing. There has been no sizable change regarding the “expectations of a recovery in daily life” and “consciousness of economizing” mentioned at the beginning of this article, so countermeasures and an economic recovery that are palpable in the mid to long term, rather than mere slogans or temporary handouts are called for.

Expenditure as a temporal break is no matter how you look at it, “temporal”, and that it is driven by the feeling of being tired of trying to creatively maintain their household budgets. In addition, while we didn’t mention this in this report, when analyzing the same data from perspectives like annual income, a more severe reality also emerges of people who don’t even have the leeway to enjoy “temporal” escapes.

I’m interested in continuing to read society and the psychology of the people in it through conducting ongoing regular surveys, just as we notice the changes in nature through daily observation.

See you again next time.

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