Economic Short Comment （14 Aug 2023）
The actual sales of supermarkets, which determine the tone of consumption～ In the most recent period, there has been a decrease of around 6% compared to the previous year ～～4● Challenges in Assessing Domestic Consumption
Discerning the actual state of domestic consumption has become increasingly challenging. While the transition to
the fifth category of COVID-19 infections and wage hikes this spring
have heightened expectations of a consumption recovery, the inflationinduced rise in frugality is intensifying downward pressure. It is【Figure 1】（％）
62

Furthermore, the ongoing surge in inbound tourism consumption is0

making the real state of domestic consumption even harder to discern.
wages, which significantly impacts the consumption trend (Figure 1).

nationwide
Osaka

4

indeed a situation where positive and negative factors intermingle.

Amidst these factors, we cannot overlook the continuous decline in real

Real Wages（year-on-year）-2-4

While there were hopes for a positive shift after this spring's wage

-6

hikes, the trend has ultimately been declining compared to the20212223（Source）Ministry of Health,Labour and Welfare「Provisional Report of Monthly Labour Survey」

previous year. With real wages continuously decreasing, a consistent

4 6 8 10 12 2 4 6 8 10 12 2 4 6 8 10 12 2 4increase in domestic consumption seems unlikely, and a cautious【Figure 2】

approach seems essential.

（％）

Consumer Price and Supermarket Price（year-on-year）

10

Consumer Price
Supermarket Price

8● Trends in Supermarket Sales
In the context of declining real wages, the movement of essential

6

goods is crucial in understanding the basis of domestic consumption.

4One such indicator is the trend in supermarket sales, which is2

currently on an upward trajectory both nationally and in the Kansai

0region, with a recent year-on-year increase of around 3%.

-2

However, considering the current inflation, the critical factor is not justsales but the real sales trends after accounting for inflation. Therefore,
we have calculated a "Supermarket Price Index" based solely onsupermarket products (Figure 2). Its increase rate is as high as 8%,
revealing a significant gap from the overall consumer price trends
since 2023. The high supermarket prices are largely due to the surge

1920212223（Source）Ministry of Internal Affairs and Communication「Consmer Price Index」 and Ministry of Economy, Tradeand Industry「Current Survey of Commerce」【Figure 3】（％）

6

Supermarket's Nominal and Real Sales(year-on-year)

4
2

in food prices, which recently exceeded a year-on-year increase of 10%.

0Given that food products make up 80% of supermarket sales, they-2

inevitably have a substantial impact.

-4-6-8● Significant Decline in Real Sales

Nominal Sales
Real Sales-10

Based on the above, the trend in real supermarket sales is as depicted
in Figure 3. It is clear that there is a significant reduction, indicating

1920212223（Source）Ministry of Internal Affairs and Communication「Consmer Price Index」 and Ministry of Economy, Tradeand Industry「Current Survey of Commerce」※ The purpose of this document is to provide information and is not intended to solicit product transactions. Additionally, thisdocument has been created based on data deemed reliable by our company, but it does not guarantee accuracy or completeness. Thecontents mentioned in this document are as of the time of writing and may be subject to change without notice in the future.

1

a challenging environment. Sales aren't growing to match the product price hikes, suggesting consumers are
reducing their purchasing volume. This epitomizes the consumption reality surrounding essential goods. Theinclination to save is unmistakably intensifying month by month in response to declining real wages. Such trends
aren't limited to essential items; there are emerging indications from the tourism industry suggesting domestic
tourist activity is starting to lag.
● Future Inflation Trends
Given the view that an increase in real wages is indispensable for domestic consumption recovery, future inflation
trends will play a crucial role. Come September, government subsidies for electricity, gas, and gasoline prices are
set to expire, and inflation rates are expected to surge at that point. The timing for real wages to turn positive
seems to be a way off.
Concurrently, with increasing corporate costs, there are concerns over declining profits, especially for small andmedium-sized enterprises. If corporate profits continue to deteriorate, the potential for wage decline might becomea significant consideration. In terms of individual consumption, there's a strong perception of the effects oftransitioning to the fifth category of COVID-19 and wage hikes. Yet, despite the seemingly positive movements ininbound tourism, the stagnation sentiment isn't prevalent. However, considering the income environment and thepurchasing status of essential goods, caution is already necessary, and future optimism seems unwarranted.
（Reference）
Resona Research Institute Co.,LtdHideyuki Araki, Chief Economist
hd-araki@rri.co.jp※ The purpose of this document is to provide information and is not intended to solicit product transactions. Additionally, thisdocument has been created based on data deemed reliable by our company, but it does not guarantee accuracy or completeness. The
contents mentioned in this document are as of the time of writing and may be subject to change without notice in the future.

2