Japan’s diaper shortage is due to smart and economical shoppers who got the jump on getting stocked up on this necessity before the sales tax hike in Japan. The sales tax is set to jump from 5% to 8% at midnight. The diapers weren’t the only popular product to get saturated with sales over the last few weeks, according to Web Pro News on April 1.
With the sales tax about to make its first jump in 17 years, the market was ripe for luxury car and condominium buyers on the higher end of the sales spectrum. The shortage of diapers really isn’t the main meat of the story in Japan. It is what the shortage might signify in the coming weeks that is worrisome.
Back in 1997 when the sales tax was about to go up, the market saw this type of surge in buying among consumers. Immediately following there was a down-turn in sales because just about everyone stocked up on the taxable items to save that extra money.
The worry of history repeating itself is looming across Japan’s marketplace today. The 2% jump in 1997 when the sales tax went from 3% to 5% caused a significant change in purchases in the weeks that followed. The 3% jump today might very well dictate a stagnant period in sales for the next few weeks.
In 1997, there was nothing gradual about the decline in sales, it was like it fell off a cliff. That type of sharp decline today could see the Bank of Japan under great pressure to act by mid-year and expand an already massive program of monetary stimulus.
Apparently they get all this from diaper sales? It is amazing that the shortage of diapers is a red flag for market forecasters today.
Retailers have a different theory of why the diapers are hard to keep on the store shelves. The Japan-made diaper is a product of quality, much more so than the Chinese-made diapers. It is a surge in people from China buying up the diapers and sending them home to their country that has taken the greatest chunk out of diaper inventory, claim the retailers.
Some of the stores have put a 1 package limit for customers per store visit. Retailers are seeing the same people from China come in and out many times throughout the day to purchase another package of “Merries,” a term used in Japan for the diaper.
Then it could be a little of both factors that have sparked the shortage of diapers in Japan today. If the retailers’ theory holds water, then diapers will continue to be a hardship to find in stores once spending gets back on track.
When the sales tax buying spree merchandise that consumers stocked up on at home becomes depleted and diapers still remain a hard-to-find item, then the retailers were right. Either way, the kids need diapers!