Rising Food Spending
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Rising Food Spending

    Japanese are spending more of their household budgets on food. Economists use a special gauge to track this trend-- it's called Engel's Coefficient. When the standard of living goes up, the figure tends to go down.

    In Japan, it has been declining since World War Two. But the trend has reversed in recent years, as people's lifestyles change.

    "Living costs are tough and food prices are going up."
    "I try to cut back on my spending to save money."
    "My washer isn't working well. But I'll keep using it til it breaks down."

    Many Japanese are not spending much these days. But some are splurging on food and that's reflected in a rise in Engel's Coefficient. This woman is enjoying a full-course meal at a French restaurant with her family. She says she dines out as often as four times a week.

    "We like trying new restaurants because it's fun. We take pictures of what we ate so we can talk about it later. And we like to return to some of the best places."

    The woman lives in a rental apartment with her husband. They got married 2 years ago. Since they moved in together, they haven't renewed their home appliances.

    They don't own a car, either. They'd rather spend money on dining out than buying things. They believe that leads to a better quality of life.

    They have been spending more than 30 percent of their household budget on food in recent months.

    "We don't want to own many things because we tend to move around for work. Aside from eating, we don't have a strong desire to spend money on anything else these days."
    "Deli food is convenient when I work late. I frequently buy food here."

    Over the past decade, the number of double-income households has risen by about 10 percent. And household spending for ready-made food has grown at the same rate.

    The peak hour to buy prepared food at this supermarket is now 6PM, 2 hours later than before. Sales here have boomed as people heading home from work flock to the deli counter.

    "Our customers expect a lot from us. We sense their need for ready-made food. We strive to provide the service they want."

    Analysts say the rise in Engel's coefficient reflects this change in consumer sentiment.

    "Many Japanese people are not optimistic that their salaries will increase, so they're getting more selective with their spending. People are also drawing a line between low- and high-priority items, and shelling out only on things that matter a lot to them."

    The Engel's coefficient may offer businesses an important clue as they struggle to spur consumer spending.