Next Month's Consumer Forecast for July 2025: Consumer Sentiment Index at 46.7 Points. Despite Summer Vacation and Bonus Season, Index Shows Month-on-Month Increase but Remains at Record Low for July. Only "Travel" Shows Increased Interest from Previous Month

Overview

This is a survey report published by Hakuhodo Institute of Life and Living on "Next Month's Consumer Forecast for July 2025: Consumer Sentiment Index at 46.7 Points. Despite Summer Vacation and Bonus Season, Index Shows Month-on-Month Increase but Remains at Record Low for July. Only 'Travel' Shows Increased Interest from Previous Month." It provides a detailed analysis of summer consumption trends and the impact of inflation on consumer psychology. ## Key Points ### 1. Survey Overview - **Research Organization**: Hakuhodo Institute of Life and Living - **Publication Date**: July 1, 2025 - **Survey Name**: Next Month's Consumer Forecast (July 2025) - **Survey Subjects**: Men and women aged 20-69 nationwide - **Key Indicator**: Consumer Sentiment Index (0-100 points) ### 2. Current State of Consumer Sentiment Index - **July 2025**: 46.7 points - **Month-on-Month**: +2.9 points (June: 43.8 points) - **Year-on-Year**: +0.3 points (July 2024: 46.4 points) - **Historical Level**: Second lowest for July since survey began in 2012 - **Record Low**: Following 46.4 points in July 2024 ### 3. Monthly Trends and Seasonality - **Spring Slump**: April-May remained in low 40s - **June Decline**: 43.8 points (rainy season impact) - **July Recovery**: Rise due to summer vacation and bonus effects - **Difference from Normal Years**: July typically exceeds 50 points - **Structural Decline**: Persistent suppression due to inflation ### 4. Category-Specific Consumption Intentions - **Increasing Categories**: - Travel: Only category with month-on-month increase - Summer vacation demand materializing - Domestic travel-centered movement - **Decreasing Categories**: - Beverages: Price consciousness outweighs heat countermeasure demand - Books/Entertainment: Suppression of leisure spending - Dining Out: Continuation of frugality mindset - Beauty Services: Minimal necessary use only ### 5. Characteristics by Gender and Age - **Women**: - Notable decline in consumption desire - Sensitive reaction to daily necessity price increases - Strengthening of saving consciousness - **Men**: - Relatively stable but at low levels - Cautious approach to bonus spending - **Young Adults (20s-30s)**: - Maintaining desire for travel and leisure - Strengthening savings in other areas - **Middle-aged and Older (40s-60s)**: - General consumption suppression - Significant impact of future anxiety ### 6. Analysis of Inflation Impact - **Direct Impact**: - Rising prices of food and daily necessities - Decline in real purchasing power - Stricter consumption choices - **Psychological Impact**: - Increased anxiety about the future - Rise in precautionary savings - Cooling of consumer sentiment - **Behavioral Changes**: - Thorough price comparison - Increase in bulk buying - Preference for private brands ### 7. Summer-Specific Consumption Trends - **Bonus Effect**: - More modest spending than usual years - Tendency to prioritize savings - Increased allocation to necessities - **Summer Vacation Consumption**: - Choice of nearby, short-term options - Suppression of goods purchases over experiences - Maintenance of child-related expenses ### 8. Industry-Specific Impact - **Travel and Tourism**: - Domestic demand remains solid - Concerns about unit price decline - Decrease in long-term stays - **Retail**: - Strengthening dependence on sales - Decline in average spending per customer - Decrease in store visit frequency - **Food Service Industry**: - Shift to lower price ranges - Increased takeout demand - Sluggish banquet demand ### 9. Regional Trends - **Major Metropolitan Areas**: - Polarization of consumption desire - Existence of high-spending segment - Widening disparity - **Regional Cities**: - General consumption slump - Increased burden of car-related expenses - Impact on local events ### 10. Future Outlook - **Short-term Outlook (August-September)**: - Loss of summer effects - Concerns about autumn consumption slump - Impact of electricity rate increases - **Medium-term Outlook (Year-end)**: - Anxiety about year-end shopping season - Continued dependence on bonuses - Entrenchment of structural slump ### 11. Implications for Businesses - **Pricing Strategy**: - Cautious timing of price increases - Development of small-volume, low-price products - Consideration of subscription models - **Product Development**: - Focus on cost performance - High functionality in necessities - Savings support services - **Marketing**: - Strengthening value proposition - Utilization of digital coupons - Enhancement of loyalty programs ### 12. Policy Implications - **Need for Economic Measures**: - Improvement of real wages - Price stabilization measures - Consideration of consumption stimulus measures - **Social Security**: - Alleviation of future anxiety - Strengthening of safety nets - Expansion of child-rearing support This survey shows that Japanese consumers face the structural problem of inflation, with consumer sentiment remaining at historically low levels despite seasonal factors in summer. Companies must carefully consider the balance between price and value and build strategies that respond to consumers' frugality mindset.