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INTAGE Continues to Monitor the Impact of the 2014 Consumption Tax Increase in Japan

INTAGE Continues to Monitor the Impact of the 2014 Consumption Tax Increase in Japan

January 13, 2015

INTAGE Inc., part of Japan's largest marketing research group and 9th largest globally1, has announced Jan.13 the latest results of its ongoing study into the impact of the April 2014 consumption tax hike in Japan. This most recent summary follows up on its previous "Report on the Impact of Japan's Consumption Tax Increase in 2014."
(See: www.intage.co.jp/english/news/2014/20140605.html)

The latest report looks at the seven-month period (through October 2014) since the April consumption tax hike, providing an analysis of the ongoing effect that the increase has had on certain consumer product segments2, and offering valuable hints for retailers and marketers interested in the Japanese market.

As Japan's foremost provider of marketing research intelligence, INTAGE will continue to track the influence of the consumption tax hike, in anticipation of the country's next consumption tax increase from 8% to 10%, scheduled for April 2017.

The full report (PDF) is available here:
http://www.intage.co.jp/english/news/2015/images/20150113.pdf (PDF 1.99MB)

1) Source: Marketing News, August 2014, American Marketing Association

2) Product segments covered in this report include: food/snacks (processed food products excluding perishables), beverages/alcoholic beverages, cosmetics, and daily sundries (including pet food and pet goods).

Overview of Key Findings

Summary of trends after the 2014 tax increase
Purchase interest has been declining mainly among younger age groups,
who are growing more budget-minded. However, ways of saving money
vary depending on the category.

  • Recovery remains stagnant; both purchase value and purchase quantity after the tax hike were lower than the previous year in almost all categories, despite expectations that purchase trends would recover by the summer of 2014.
  • The age 60s segment showed the highest pre-hike growth in purchase value and quantity, and the quickest post-hike recovery. Recovery has been less pronounced among the 20s-40s segments; most categories are still lower (minus) compared to the previous year.
  • Expenditures have gone up, but income/bonuses have not risen accordingly; price-consciousness is higher, especially among the 20s-40s segments.
  • Feelings of "financial security" are down among all segments versus the previous year, particularly the 30s-40s segments.
  • Purchase frequency and volume have decreased overall (other than daily food items) compared to the previous year.
  • Budget-minded consumers are shifting from frozen foods to more fresh food items; more consumers are moving to private brands and special bargains for high-necessity items such as toilet paper.
  • Looking ahead, important keywords for consumers are "price" and "added value". Marketing plans need to focus on both price strategies and the communication of added value.

Please direct any inquiries to:
INTAGE Inc., Public Affairs Group https://www.intage.co.jp/english/contact/

About INTAGE Inc.  http://www.intage.co.jp/english/
INTAGE Inc., (Head Office: Chiyoda-ku, Tokyo; President and Representative Director: Noriaki Ishizuka) a member of the INTAGE Group of companies, is a long-time specialist in marketing, consumer panel and retail tracking research. Together with other Group entities, the company harnesses its research, data collection & analysis, and system solution technologies to partner with clients in a broad range of industries, deliver strategic insights, and provide the actionable intelligence needed for their management and marketing decision-making processes in Japan, throughout Asia and around the world.

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