Revitalizing the consumer mind

Toshifumi Suzuki Vice Chairman, Keidanren President and Chief Executive Officer, Ito-Yokado Co., Ltd.

Japan's current recession is forcing the people to deal with conditions, which they have never before experienced. Looking back over the past 20 years, there have been several economic slumps. In comparison to those of previous years, recent sales profits for department stores and supermarkets, representing the individual consumer, have decreased consistently since the Bubble Economy collapsed.

However, looking at the balance sheet of the home economy, I would assume that the cash flow ("potential buying power") has enough savings. In spite of that, consumption has been stagnant for a prolonged period. I believe that this is due to the consumers' uncertainty about the future.

Provided that the potential buying power is strong enough, we only need to stimulate the consumers' minds in some way, regardless of whether we use a new product or a new way of consumer service, then consumers will quickly respond to us. Our modern era demands that we no longer read the current consumption pattern in a purely economic light. Psychology, too, must be used; and when seen in that viewpoint, it is clear that there are various measures which could be taken.

However, the revitalization of the consumer mind is a difficult task to undertake for business organizations on their own.

In order to cease this uncertainty about the future, we must take urgent steps forward, such as stabilizing the financial system and the safety net, reforming the pension system, etc.

These steps are necessary not only to relieve the current economic situation, but also to meet the needs of our country's future with fewer children and growing numbers of the elderly (One of the few scenarios of this type in the world). In an ever-changing social and economic environment, we are being asked to hammer out an ideal framework for society and the certain social scheme.

Our responsibility now is to observe and to accept the current situation, to move beyond past, economic theories and experience, and then, most importantly, to establish a new social agreement.