Japan Goes Wild for 100-Yen Prices
Dried squid, plastic cups, even haircuts—all for low, low prices.
By Sheridan Prasso
Nov 28, 2005

Japan has a yen for 100-yen pricing. In the Ginza section of Tokyo, at the brightly lit six-story, 24-hour Hyper Convenience USMart that opened this summer, customers rolling in at 2 a.m. after an evening of karaoke can browse thousands of items of plastic ware, painted pottery, and snacks such as dried squid, all priced at 100 yen (85 cents). They can also play billiards, use the Internet, or get a haircut at the rate of 100 yen for ten or 15 minutes.

Earlier this year McDonald's started offering a 100-yen menu. Lawson, a convenience-store chain, has opened the first eight of a planned 1,000 Lawson 100 Stores. And Kodaira, one of five major 100-yen chains, plans to quadruple the opening pace of its 24-hour Shop 99 stores. The company, which currently has 680 stores in Japan, expects to have 3,000 by 2010. Sales at 100-yen stores, about $4.3 billion for the fiscal year that ended in June, are expected to double over the next four to five years.

One-hundred-yen stores have been around since Japan slipped into a recession in the early 1990s. But the recent explosion of cheap retailing is occurring as the economy is rebounding from years of stagnation. What's driving the trend is a breakdown of Japan's homogeneous consumer society brought on by a steady decline in average household income, pay for merit instead of seniority, and a growing part-time workforce.

Deep discounting is putting deflationary pressure on food and beverages as well. Supermarkets, which have had to respond not only to hypermarkets and Wal-Marts but to the fresh produce increasingly available at 100-yen stores, have been putting up "100-yen corners," with items such as potatoes, cucumbers, and eggs packaged in 100-yen bundles. Convenience stores, which rely on a steady flow of late-night beer-buying customers, are pricing a beer-like, carbonated alcohol beverage known as happo-shu , which is similar to beer but isn't as heavily taxed, at 100 yen—cheaper than bottled water. And the ubiquitous street-corner vending machines are now offering beverages for 100 yen instead of the usual 120.

"That's something I haven't seen since the mid-1980s," says Joe Mizuta Seavy, senior manager for Japan Market Intelligence, a research firm. "Decent quality at a reasonable price is very big right now. Before it was limited to housewives. Now it's extended. It's commonplace to discuss getting a good deal, whereas that wasn't the case ten years ago."

Of course, luxury brands continue to sell well in Japan. But for Japan's middle class, no longer content with middling goods at high-priced department stores, it's sayonara to $5 tomatoes.