J3J Episode 20: Deflationary Japan 「経済はダメ。全然ダメ。」 ーはしごやの笠原さん "The economy is hopeless. Totally hopeless." - Kasahara-san / Hashigoya Slowly but surely, Japan is imploding. When I returned here last year, I was a little surprised to find that most prices were exactly what they had been before in 1998, but only gradually did the realization creep in that they are actually falling, lower every single day. It started with McDonalds, which slashed the prices of its basic burgers in half, to only Y65 for a hamburger -- half the price of a can of soda in a vending machine. The one near the U. of Tokyo sports food-relief queues at lunchtime, while most other Japanese hamburger chains are struggling to survive. The giant Korean chain Lotteria copied McD's tactics and prices, and is flourishing again; Burger King Japan didn't have the necessary economies of scale, and filed for bankruptcy last month. (McD's, on the other hand, recently announced plans to *triple* the number of its outlets in Japan to 10,000.) The bloodletting has been extended to the rest of the food industry. Yoshinoya, Matsuya and Tenya are doing a roaring trade, thanks to their sub-Y500 full meals, while corner shops and the humble independent shokudou (食堂) eateries seem deserted (and expensive) in comparison. Yet harder hit are restaurants with a tag of luxury, be they sushi, fugu, chankonabe or French; the mom-and-pop corner sushi shop next to Yoyogi-Uehara station, which still disdains putting its normal prices on display, now offers its lunch nigiri set for a scarcely credible (but highly edible) Y800. And, yes, the soda vending machines, which for years had fixed prices at Y120, have now started selling some drinks for a mere Y100. The entertainment sector, which still appears hyperactive to all but the most discerning Western eye, is also feeling the pain. Crowds flock to cheap but soulless izakaya chains like Watami and Tengu, deserting the innumerable little independent pubs that dot every corner. Bar-hopping has always been an expensive pastime in Japan, with the cover charge (which may not even net you a bowl of peanuts) clocking in at Y500 and up and drinks priced similarly, so now all but the most outstanding bars are empty. I walk past 10 or so daily on my way to and from work, and there are some that don't seem to have any customers even on weekends. Of my three regular hangouts, Bar Abura in Komaba has no cover but survives as the owner's hobby, while legendary izakaya Hashigoya in Shimokitazawa doubles as the owner's apartment and subsists primarily by looking the other way (but collecting the cash) as teens get blotto. The epitome of elitist snobbery, Shibuya's Tantra, still has waiters in black suits and no signs outside, but has lowered its cover to a mere Y1000 and now has business cards featuring (gasp) a phone number and a map. Alas, techno parties are still as expensive as ever (and seemingly getting worse), but the days of having to line up outside to get in also seem to be past... What else? Everything else. Land prices are still slowly fizzing downward, as they have every year for the last decade since the bursting of the bubble. Sogo, once one of Japan's flagship department stores, went bankrupt last year. Banks and insurance companies are merging and collapsing left and right. Travel industry companies are in cutthroat competition for offering the craziest discount packages, some hotels now offer a night with two meals for less than the price of a youth hostel bed. Remember the Kinugawa Green Palace from a few episodes back? They slashed their prices in half and replaced most of their staff with cheaper Chinese immigrants. Even Hakone's Kappa-tengoku had reduced their rates from Y8000 to Y6600 in the space of one year. Japan was for long one of the world's most expensive places to travel (and it still is if you pay list prices), but now each of the 3 biggies -- JAL, ANA, JAS -- has announced special discount plans offering flights anywhere in Japan for Y10000 or less, a savings of over 80% on some routes. Alas, Japan Railways has yet to catch a clue in this respect, but what can you expect from a governmental monopoly in all but name... And the worrisome part is that there still remains so much air to be squeezed out, and that the spiral is only beginning. I went shopping today at Nezu's Akafudedo, an old-guard supermarket that has the largest selection of any shop on my way home and prices correspondingly. I needed to buy some garlic, but initially balked at paying 210 yen (remember, that's $2, or about 12 mk) for a single bulb. But the canned garlic puree upstairs was even more expensive. So I bit the bullet and continued on my way... only to find that the old yaoya-san (八百屋, fruit & vegetable shop), which has to undercut all its competition in order to survive, was selling garlic at Y100 for 3, *one sixth* the price at Akafudedo. Guess where I'll buy my veggies next time? Uehara's Nakadoori-shotengai (仲通り商店街) shopping street, which I walk from end to end twice every day on my way to and from the university, is a useful case study. There are perhaps 30-40 shops of various kinds along its length, which can be divided into 4 categories. The first, "Flourishing", is the shortest: it consists of the Lawson convinience store, the Marusho (mini)supermarket and the Shanghai Express Chinese delivery service, all busy at all hours. The second category, "Getting By", isn't that much longer: the yaoya-san and most of the restaurants on the street (the soda noodle shop, the tonkatsu place, the yakitori bar and the ramen joint) seem to retain some volume, even though they're a faint shadow of the crowds at the McD's, KFC and Mr. Donut at the station itself. There are also 3 dry cleaners along the same street, who all seem to subsist against the odds. I have my doubts about the viability of the 2 flower shops, the drugstore and the expensive barbershop, but at least they're trying. And Bar Abura, mentioned earlier, gets by because it doesn't have to... The third category, "Doomed", is longer. Most of the shops on the street (and almost all the ones on this list) are highly specialized, hopelessly obsolete and run by people way into their retirement age. From memory, this includes the two shoe stores, the kimono cloth shop, the tea shop, the office supply shop, the liqour store (which probably subsists thanks to its vending machine row), the cracker shop, the camera shop, the unagi (eel) restaurant, the odd plastic stuff store (thoroughly obsoleted by the 100-yen-shop invasion), the little home electronics shop, and a number of somewhat mysterious outlets which are open only very intermittently because they and/or their owners are well on their way into the next category, "Dead". I also suspect that the 4 or so other bars and the cafe-restaurant in the middle of nowhere are on their way to oblivion, at least based on the fact that there are never any customers. None of these can compete on selection, quality or price; they exist because their owners have been shoe or cracker sellers all their life, live in the same building, and have nothing else to do, nowhere else to go. And when they die their shops die. The street also has the shuttered remains of a sewing machine shop, a paper store, a tatami store, a rice store, a butcher shop, an antique store, a sewing goods store, a tobacconist (now hidden behind a row of tobacco vending machines), a pre-supermarket era general store, an antique store, a ramen noodle joint (with broken windows, a highly unusual sight in Japan), a second home electronics shop, a toilet bowl vendor... paint flaking off rusty signs still creaking in the wind. The kanji above one former shop have long since been illegible, except for the words "est. Meiji 30" [1898]. The only one that doesn't quite fit the pattern is a boarded-up former Domino's Pizza office, but they were overpriced anyway. (The chain itself still lives.) Give it another ten years, and the Doomed shops will also be Dead, and the street will have become yet another "shutter-gai", a former shopping street with nothing left but shuttered windows, turning into apartment "mansions" one house at a time. A shame? In some ways, yes; the few remaining real Tokyo market streets, like Ueno's Ameyoko-cho or Sendagi's Yanaka Ginza, do have a wonderful atmosphere. But while they may be nice tourist attractions, they are still terribly inconvinient for actually getting your shopping done if you don't have the entire day to spend. That's why Japan is finally catching up to what the West figured out long ago: just place everything under one large roof with low prices and good lighting and call the result "Walmart", "Carrefour" or "Don Quijote", and the customers will come to you. Sure, the West had its little shops too at one time, but they have lived on in Japan so much longer thanks to inefficient middlemen, coddled corporations and government bureaucracy that for decades colluded to squash competition and fix prices. The current deflation is just the market finally adjusting to market prices, figuring out how supply and demand work in the real world. But, on a happier note, at least the English-mangling industry is still barging into the 21st century. Recent finds include the successor of the venerable Walkman in the form of the "Super Flushman" urinal, the trendy fashion shop "Junkie a Gogo" for that emaciated heroin addict look, the painfully crunchy "Powerful PITA" vacuum cleaner by Sanyo, and last but not least, the remarkably aptly named "La Vie en Lose" bordello, which even has a homepage (http://www.lavieen-lose.co.jp). Better not check that one at work though, kids...