Uniqlo and Saizeriya Show Why Raising Prices in Japan Is So Hard

In Japan, companies are finding it painfully difficult to raise prices, even as their costs rise. The latest example: restaurant chain Saizeriya issued a near-apology for adding just 20 yen (13 US cents) to its popular Milanese Doria dish, blaming its 'lack of effort.' Clothing giant Uniqlo also faced backlash and reversed a price increase on its socks. These incidents highlight a deep-rooted problem: after decades of falling prices—known as deflation—Japanese consumers have come to expect prices to stay low or even drop.

Deflation is when prices fall over time, which sounds good for shoppers but can be bad for the economy. When people expect prices to fall, they delay purchases, which hurts businesses. Companies then can't raise wages, and the cycle continues. Japan has been stuck in this mindset for over 20 years, and now, with inflation finally rising due to global costs, firms are caught between rising expenses and consumers who resist paying more.

The struggle is not just about a few cents. It reflects a broader challenge: how do you change a national mindset? For companies, raising prices risks losing customers, but not raising them risks going out of business. Some, like Uniqlo, have tried to sneak in increases but backed down after criticism. Others, like Saizeriya, are apologizing profusely to soften the blow. This suggests that even small price hikes are a big deal in Japan.

For the rest of us, this is a reminder of how powerful consumer expectations can be. If people are used to low prices, it's hard to reset that. It also shows why inflation can be stubborn—once it's in people's heads, it's hard to get out. And for Japanese workers, it means wages may not rise as fast, making it harder to afford daily life.