Hundred-dollar melons and pricey designer handbags used to sell so well in Japan that companies considered luxury goods a mass-market sector. But while the Japanese kept on shopping through previous recessions, this one has produced a sea change. The luxury industry has been hard hit, and the change may be permanent, the New York Times reports. The local version of Wal-Mart, in the red for seven years, is finally on track to turn a profit this year.
In supermarkets, Japanese are buying local bean sprouts instead of $4 cabbages, while clothing retailers are in a price war over $10 jeans. LVMH, the luxury conglomerate that owns Louis Vuitton, has canceled plans for a new Tokyo boutique, as the once must-have bags go out of fashion. "People used to feel they needed a Louis Vuitton to fit in," said one 19-year-old. "But younger girls don’t think like that anymore."