Tuesday, May 01, 2012

Nobody Pays Retail

These, according to Business Week, are the prices one pays for goods in Tokyo:

No. 1 Most Expensive City: Tokyo
Quick lunch: $20.80
Beer at a bar: $10.56
Kilogram of rice: $9.80
Dozen eggs: $4.50
Movie theater ticket: $23.80

Has anyone ever paid these amounts, even at 80 yen to the dollar, except in Azabu-Juban or at inside an international-class hotel?

The highest class Koshi Hikari from Uonuma in Niigata-ken (Niigata connoisseurs prefer rice from Sadogashima, but that is another story) costs me 3850 yen for the 5 kilo bag at my local supermarket, which works out to $9.63 at 80 yen to the dollar.

But I never buy Uonuma Koshi Hikari. I might accept it as a gift but I would never buy it myself. I am more than happy with Akita Komachi at 2580 yen or Tochigi Koshi Hikari at 2850 yen per 5 kilo bag. However, even these I prefer to buy on sale, which they are at least once a month.

A dozen eggs at $4.50? First of all, you cannot buy eggs in a dozen, not formally: eggs in this blessed land come in packages of ten -- as they should in any country with a commitment to the decimal system. Second, the most expensive eggs at my supermarket come in at 298 yen for a package, which if you upped it to a dozen, then divided by 80 yen to the dollar, comes to $4.47.

Whisper close, but again, I baulk at buying eggs at 298 a package. Eggs at 258 yen for 10 is my speed.

The same holds true for almost every price one sees quoted in these lists, whether they are compiled by ECA International, The Economist Intelligence Unit or whomever. Whenever sees the prices residents in the blessed must supposedly pay, even in high-priced Tokyo, one suspects that the test shoppers made at least one trip to Meiji-ya in Hiro, which is like calculating fruit costs based on a trip to Senbiki-ya -- something one does to get a good laugh, not a serious result.

Even if one drops the likely cost-skewing culprits -- the aforementioned Meiji-ya, Nisshin World Delicatessen and Mitsukoshi (for clothes, perfume and accessories) -- nobody ever pays retail for anything. There is always a coupon, a time-limited sale, a price for employees of keiretsu ally or, if one is willing to gamble a little, a low-cost alternative source.

The gamble sometimes does not pay off, as the unfortunate passengers on a Tokyo Disneyland-bound bus found out in horrifying way on Friday (E). The regular fare on a JR expressway point-to-point passenger bus from Kanazawa to Tokyo Disneyland is 7850 yen. This type of bus transportation is strictly regulated as to its operations, particularly the number of hours a driver can be on the road during a given span of time.

However, the passengers on the deadly bus ride from Kanazawa paid only 3500 yen for the same trip, based upon the semantic subterfuge of labeling the bus a "tour bus." Regulation for the operations of tour buses are much more relaxed than those for point-to-point buses, meaning that the same driver can drive many more hours, lowering the unit labor costs, which make up a significant portion of the cost of the drive. (J)

The accident and the likelihood that cost cutting measures shortcuts were taken demonstrate that outside the purview of the providers of information for the international traveling set, this blessed land is becoming more like other countries. Safety regulations can be and are circumvented -- and as the customers move downscale in terms of their consumption patterns, they will encounter these heretofore atypical tradeoffs more and more often.

An aside, but did anyone notice how it took only a day for the police to raid the premises of the tour bus company and the home of the company's owner in search of evidence of illegal cost-cutting practices -- but a month to decide raid the offices of AIJ Advisors after the story of the obvious Ponzi scheme made the papers and the news broadcasts?

Any chances that in the intervening month, AIJ executives might have altered, deleted or destroyed evidence?

A double standard in an underregulated industry, would you say? (E)


Jan Moren said...

Good points on the price.

Two observations, though: the "expensive city" ranking is generally aimed at the temporary fully-financed expat — working for a few days, weeks to months — rather than the permanent resident.

A "simple lunch" at 1700 yen may sound silly to us, but if your choice of lunch is whatever is offered at the high-cost place your coworkers take you to in the financial district that may not be out of line. And if you're a single expat, not a family of four, the price for small packages of things are more relevant than what you could buy in bulk (and end up never finishing before it goes bad).

The second observation is of course that other cities' prices are similarly inflated, and thus the relative ranking may end up quite accurate at the end.

And as a final ps., eggs always come in packs of six around here. Which, for a two-person household, is perfect.

Anonymous said...

I don't know if it's so much double standard as whether the matter involved blood and death.


MTC said...

YY -

Perhaps you are right...but there are probably also decidedly fewer amakudari advisory positions in the tour bus industry.

Climate Morio said...

I would really appreciate somebody telling me a low-cost alternative for buying cheese, sun-dried tomatoes and coriander. Nisshin needs some serious competition!

Troy said...

>Meiji-ya in Hiro

hey man after 3 years in-country I was going crazy so I decided to live within walking distance of the National Azabu.

The joke goes that the rent was so high (11万) I couldn't afford to shop there any more!

MTC said...

Climate Morio -

Does Kaldi not cut it, for items other than fresh produce?

Jan Moren said...

Climate Morio shows an important point in these kinds of comparisons: you can't really compare the prices of the same products, because one and the same item may be a staple in one country and a luxury item in another.

Cheese in Japan has a pitifully small selection, at exorbitant prices, compared to my native Sweden. Compare price of cheese and Japan will be several times more expensive.

On the other hand, check prices for udon, katsuobushi or tofu in Japan and Sweden and Japanese supermarkets will suddenly be very, very cheap indeed.

Point is, if you're going to compare living costs for residents (not travellers or expats) you need to look at prices for what people typically eat and do, not just blindly make up a "standard basket" of items that may be highly non-standard in most of the places you compare.

Anonymous said...

Not only do theses prices concern expats, they are gathered by expat wives, who know the husbands' salaries depend, partly at least, on the result. The more expensive, the best hope of a raise... I know, I took part in one of those surveys while living in Latin America. My Japanese friends and I gleefully chose the most expensive items, and liberally rounded prices up ! Needless to say, the Company never double checked.

MTC said...

Anonymous -

Sigh...When a published result deviates from observable reality, assume an incentive.