"The End of Price Increases" and "Life Has Become Easier" Are Not the Same — The Crisis of Purchasing Power for Groceries in Japan and the US

Even when we hear that "inflation is calming down," it doesn't feel like life is getting easier. At the supermarket, we see products that have become smaller, condiments that have gone up by a few dozen yen, and meat and fruits that we hesitate to buy. Many people have probably experienced returning items from their shopping basket before checkout.

An article published in the U.S. Forbes raises the issue of the gap between this lived experience and economic statistics.

When discussing the affordability of groceries, we focus too much on prices and inflation rates. However, the real question is not just "how much does the product cost," but "can it be paid for with that person's income," as the article argues.

This is not merely a change in wording. It is a perspective that has the potential to change policies regarding high prices, corporate pricing, wage increases, and the prioritization of consumer support.

Inflation rate is "the speed at which prices rise," not "the price"

First, it should be clarified that even if the inflation rate declines, price tags do not necessarily return to previous levels.

The inflation rate indicates how fast prices are rising. For example, if a food item goes from 100 yen to 110 yen and then to 112 yen the following year, the initial increase rate is 10%, and it drops to about 1.8% the next year.

However, the product hasn't returned to 100 yen. The rate of price increase has only slowed, and the price level remains at 112 yen.

If the inflation rate is likened to the speed of a car, the price level is akin to the altitude of a mountain. Even if the speed of climbing slows, the fact that one has already climbed to a high place does not change.

In the U.S., in June 2026, the overall consumer price rose by 3.5% year-on-year, with food up by 3.0% and groceries by 2.7%. Meanwhile, the real average hourly wage slightly decreased compared to the same month the previous year. Even if price increases are weaker than at one time, if wage purchasing power does not sufficiently recover, the sense of household burden remains.

The same is true in Japan. In June 2026, the consumer price index rose by 1.7% year-on-year overall, and the index excluding fresh food rose by 1.6%. By the numbers alone, it seems that price increases have calmed compared to a few years ago.

However, in the Bank of Japan's survey on living awareness, 55% of respondents said they "feel less comfortable living." Combining those who felt "prices have risen considerably" and "have risen slightly," the figure exceeds 95%, with more than 86% of those who felt the price increase perceiving it as a problem.

There is a clear gap between official inflation rates and people's perceptions.

National averages do not reveal "who cannot afford to buy"

Another problem with judging affordability based solely on the average price of groceries is that income disparities become invisible.

According to statistics from the U.S. Department of Agriculture, in 2024, households in the lowest income bracket spent an average of 33% of their pre-tax income on food. In the highest income bracket, it was only 6.4%.

The weight of the same $10 price increase is not the same for everyone.

For high-income households, it might be an amount that can be absorbed by reducing dining out once. For low-income households, it could lead to choices like skipping breakfast, reducing meat, or not buying fruit for children.

Across the U.S., in 2025, the percentage of disposable income spent on food was an average of 9.7%. Looking at this average alone, the impression of a food crisis is weak. However, when looking separately at low-income groups, households with children, the elderly, and urban residents with heavy rent burdens, the situation is entirely different.

While the average may be affordable, specific groups cannot pay. This is why it is necessary to look not only at "price" but also at "ability to pay."

In Japan, "gross salary" and "money available for food" are different

Looking at Japan's wage statistics, the total cash earnings in May 2026 increased by 3.2% year-on-year, and real wages also turned positive. By the numbers, it seems that wages are beginning to catch up with prices.

Yet, the reason why it is difficult for life to become more comfortable is that not all of the increase in wages can be spent on food.

Taxes and social insurance premiums are deducted from wages, and rent or mortgage, electricity bills, communication costs, transportation costs, education costs, and medical expenses are paid. Many households take out food expenses from the remaining amount.

Even if the gross salary increases by 3%, if social insurance premiums, rent, and utility costs rise simultaneously, the budget available for supermarkets hardly increases. Even if average wages rise due to overtime pay or bonuses, if the monthly base salary does not increase, it is hard to say that stable payment ability has improved.

According to the Ministry of Internal Affairs and Communications' household survey, the consumption expenditure of households with two or more people in May 2026 decreased by 0.4% in real terms year-on-year, marking the sixth consecutive month of decline. Meanwhile, spending on food increased by 2.4% in real terms.

It is possible that rather than being able to buy groceries with ease, households are curbing transportation and other expenses amid rising food costs. Meals cannot be completely cut. Therefore, rising food prices squeeze other categories such as entertainment, clothing, education, and savings.

We must look not only at the food expenses themselves but also at what has been sacrificed to secure food expenses.

Three reactions appearing on social media

Checking social media posts about the burden of groceries reveals three main reactions.

The first is ingenuity in protecting one's livelihood.

On U.S. message boards, voices are heard saying, "I buy not what I want to eat but what's on sale," "I search for other stores' prices at the storefront," "I've started using coupons I used to throw away," and "I no longer choose the type of meat." In posts dealing with food expenses in Japan, there are movements to share family compositions and monthly food expenses or exchange information about cheap supermarkets and bulk buying.

Consumers are not passively accepting price increases. They are changing brands, changing stores, comparing quantities, reducing dining out, and increasing home cooking.

The second reaction is that "there is a limit to individual ingenuity."

If you go around multiple stores according to sale days, it costs gas or transportation fees and time. Apps and membership registrations to find cheap products have also increased. Even if large-volume products are cheaper per unit, they require a lump sum of cash at the time of purchase and storage space.

Those with more disposable income can buy in bulk at membership warehouse stores or add freezers. Conversely, those with little cash on hand have no choice but to buy small quantities of products at a higher price each time.

To save money, time, means of transportation, storage facilities, and cash that can be paid in advance are needed. There is a paradox that the poorer you are, the harder it is to shop efficiently.

The third reaction is distrust of companies and the government.

On social media, voices are repeatedly heard saying, "Corporate profit preservation is prioritized," "Salaries are not catching up with prices," and "The government's announced inflation rate is far from my shopping." On the other hand, there are counterarguments that "not everything should be explained by corporate opportunistic price increases," and "logistics costs, raw material costs, and labor costs are also rising."

Opinions on the causes are divided, but the common feeling is that "with the same income as before, you can't shop the same way as before."

Since social media is not a statistical survey, posts cannot be regarded as representing the entire public opinion. However, they provide clues to understand what people are struggling with and how they understand the problem in words.

What is being spoken about is not just dissatisfaction with price tags. It is anxiety about the ability to pay, saying, "Even though I am working, I have less leeway to buy what I need."

A Japanese version of the "ability to buy food" index is needed

So, what kind of index is needed to measure the affordability of groceries in Japan?

A simple method would be to divide the price of a standard grocery basket by disposable income. However, this alone cannot adequately represent the differences between Tokyo, where rent is high, and rural areas, between households with children and single-person households, or between elderly households.

To get closer to the lived experience, it is necessary to subtract unavoidable expenses such as housing costs, basic utilities, commuting costs, medical expenses, and childcare/education costs from net income after taxes and social insurance premiums. Then, calculate what percentage of the remaining amount is occupied by the cost of preparing a healthy meal.

Even if grocery prices are the same, the ability to pay differs between households with a monthly rent of 50,000 yen and those with 150,000 yen. It also differs between regions where a car is essential and those where public transportation is available. In households with burdens of illness or caregiving, the leeway to allocate to food expenses becomes even smaller.

The important thing is not "can the average household afford it," but to visualize "which households in which regions have to cut back on what to maintain a healthy diet."

What is required of retail companies is not simple price cuts

The idea of emphasizing payment ability poses challenges for supermarkets and food manufacturers as well.

If only cheapness is pursued, it will affect payments to producers, wages for store employees, logistics, and quality control. If the price is forcibly suppressed, weakening the supply chain, it could lead to future shortages or sudden price increases.

What is needed is not to make all products cheap but to ensure that there are reliable options for essential goods.

For staple foods, eggs, milk, tofu, vegetables, meat, and fish, low-priced products should be stably supplied. Prices should be displayed in a way that makes it easy to compare unit prices, and the same discount opportunities should be provided to elderly people who do not use apps. Reduce food waste before closing and divert it to discount sales or donations. Collaborate with local food banks and children's cafeterias.

Moreover, lower-income groups may cut back on healthy foods and lean towards cheap, high-calorie products. Price strategies affect not just sales promotion but also community health.

Being able to buy groceries is not the same as being able to buy nutritious meals.

Policy is not just a choice between "price cuts" or "benefits"

In policies to reduce the burden of groceries, reductions in consumption tax, subsidies, cash benefits, and vouchers are often discussed. However, if the same measures are applied to all households, the effect on those who need support the most may be diluted.

Since high-income households also consume more, uniform tax reductions distribute support amounts widely to high-income groups as well. On the other hand, if the target is narrowed too much, households that slightly exceed the criteria will not receive support.

What is needed is a combination of multiple measures.

Provide quick benefits to households with children and low-income households, reduce the burden of school meals, offer food support that is easy for the elderly and singles to use, provide tax credits for low-income working groups, and support housing costs. Instead of just trying to lower food prices, policies are needed to reduce fixed household costs and increase the leeway to spend on food.

Wage increases are also essential. Particularly important is the continuous rise of the monthly base salary, not just bonuses or one-time payments. Food is purchased monthly and weekly. A one-time payment once a year does not stabilize daily payment ability.

From a "cheap country" to a "country where you can afford to buy"

Japan has long regarded the lack of price increases as a reassurance for consumers. However, if companies suppress wages to maintain low prices, resulting in stagnant consumer purchasing power, cheapness is not sustainable.

Even if product prices are low, it cannot be said to be affluent if wages are also low.

Conversely, if fair wages are paid, income steadily increases, and necessary food can be purchased without difficulty, it may be possible to maintain the quality of life even with a certain level of price increase.

The goal should not be a country where only price tags are cheap. It should be a country where workers, producers, transporters, and sellers receive fair compensation, and everyone can choose a healthy diet.

The perspective presented by the Forbes article, "look at the ability to pay rather than price," poses a significant question for Japan as well.

Knowing what percentage the inflation rate has reached or how much the average salary has increased does not tell us whether people can buy ingredients for dinner.

The true resolution of high prices is not when the speed of price increases slows.

It is when you no longer have to return items from your shopping basket.

Source URL

1. Forbes. The article argues that the affordability of groceries should be considered not just by price but by household payment ability.
https://www.forbes.com/sites/hankcardello/2026/07/23/grocery-affordability-is-about-ability-to-pay-not-price/

2. U.S. Consumer Price Index for June 2026. Used to check year-on-year comparisons of food, groceries, dining out, etc.
https://www.bls.gov/news.release/cpi.nr0.htm

3. U.S. real wages for June 2026. Used to confirm that the real average hourly wage decreased year-on-year.
https://www.bls.gov/news.release/realer.nr0.htm

4. The percentage of disposable income spent on food in the U.S. The USDA data shows that the