RETAIL CHAIN IN JAPAN TO CUT COSMETICS PRICES BY UP TO 25 PERCENT

RETAIL CHAIN IN JAPAN TO CUT COSMETICS PRICES BY UP TO 25 PERCENT

Japan's retail revolution reached the cosmetics counter Wednesday, when one of the nation's leading chain-store operators said it was cutting the price of hundreds of cosmetics products by up to 25 percent.

Daiei Inc. said it would slash the price of items from three cosmetics firms, including the biggest maker, Shiseido Co. Ltd.A Daiei spokesman said that of 326 shops selling cosmetics products, the new prices will apply at 40 discount stores throughout the country on a trial basis starting Tuesday.

The retail price of 754 cosmetics products made by Shiseido, Kanebo and Kose Corp. will be cut by 15 percent to 25 percent.

The cut will apply to products on shelves, not to items sold mainly on individual advice from sales clerks trained by the cosmetics makers, he said.

Cosmetics prices were considered a last bastion in the retail revolution under way in Japan, analysts said.

Retail prices of a wide range of consumer goods such as cleaners, beer and home appliances have fallen sharply in the past few years as big supermarket chains have cut prices and low-priced imports have increased, they said.

It was expected that big supermarket chains would start cutting cosmetics prices after the Fair Trade Commission, Japan's anti-monopoly watchdog, accused Shiseido of breaking the law, they said.

Last month, the FTC accused Shiseido of breaking the anti-monopoly law by fixing retail prices of its cosmetic products. Shiseido denied the charge early this month and has rejected the FTC warning.

A Shiseido spokesman said Wednesday, "We don't have any comment about Daiei's decision . . . We will continue to let retailers decide the price at which they sell the products."

Toshihide Yoda, an analyst at UBS Securities Ltd., said, "Cosmetics makers' power in controlling prices has been very strong. The reality is that prices of cosmetics products in Japan are unreasonably expensive, compared with overseas."

Shiseido accounts for about 40 percent of the nation's cosmetics market, Kanebo about 20 percent, and foreign products roughly another 20 percent.

Major supermarket operator Jusco Co. was the first retail chain to start cutting prices of cosmetics products, doing so on July 1.