Major Japanese supermarkets cut prices to retain consumers

TOKYO, Oct. 18 Kyodo - Major supermarkets in Japan are competing using price cuts to retain consumers
as the sagging stock market and worsening corporate earnings have tightened
their purse strings.
Aeon Co. began its largest-ever discount campaign Saturday at about 2,000
stores operated by its group companies, with the prices of about 1,000 items
slashed an average 20 percent until the end of February.
The campaign, covering the Jusco, Daiei, Maruetsu, MaxValu and Saty stores,
focuses on food products, daily necessities and clothing items.
''We'd like to consider extending the sales while monitoring the response from
our customers,'' Shohei Murai, president of Aeon Retail Co., a wholly owned
subsidiary of Aeon that operates Jusco and MaxValu supermarket stores, said at
a news conference at a Jusco store in Tokyo's Shinagawa Ward.
Rival Ito-Yokado Co. implemented a discount sale of up to 50 percent on
beverages, imported items and other products Wednesday and Thursday at 174
stores.
''The number of visitors has increased compared with year-before levels,'' an
Ito-Yokado official said. ''We have confirmed that customers are becoming more
price-conscious.''
Ito-Yokado is considering a second round of price-slashing.
With the recent downturn in food and oil prices helping many manufactures
refrain from price hikes, there is room for supermarkets to implement drastic
price cuts.
But it is uncertain whether supermarkets can retain frugal consumers as the
global financial crisis begins to affect the real economy.
''Consumption is in a severe situation we've never experienced,'' said an
executive at a major supermarket operator.
Among food makers considering price hikes, Nissin Food Products Co. and Myojo
Foods Co. have decided not to raise prices on their instant noodle products.
A Myojo official said the company considered recent stable wheat prices in
making the decision.
Major bread maker Yamazaki Baking Co. plans not to increase its prices.
An increasing number of makers are worried that further price hikes could
dampen consumer sentiment, analysts said.
==Kyodo