Price increases are planned in 2023 at the majority of Japanese companies that produce food and other daily necessities, a Nikkei survey finds, with businesses caught between covering surging costs and keeping customers happy.The December survey of 46 leading companies found that 27, or 59%, intend to raise the sticker price of their products or reduce their size, essentially a price hike by other means. Just one company said it would stick to current prices. Eighteen, or 39%, had not decided or did not respond, suggesting the possibility of more widespread hikes down the line.The average planned increase is 18%, 4 percentage points more than the full-year average for 2022.Among respondents to the survey for 2022, 89% ended up raising prices or cutting sizes. In the 2023 survey, 59% anticipated higher costs for materials this year. Of them, 28% predicted that costs would rise by less than 10%, while 22% expected an increase of 10% to nearly 20%.Tokyo-based researcher Teikoku Databank found that 105 publicly traded food producers raised prices for over 20,000 products in 2022. Over 7,000 products already are slated for a hike in the January-April period, 50% more than in the same period last year. Nisshin OilliO Group, which has raised food oil prices six times since spring 2021, will boost the price of olive and sesame oil again in March. Ajinomoto raised the price for its eponymous seasoning again on Sunday.The trend extends to products that long resisted hikes. Otsuka Pharmaceutical will increase the recommended retail price for its Calorie Mate energy bars in February for the first time since launching the product in 1983. NH Foods and Prima Meat Packers, two leading producers of ham and sausage, increased prices twice last year in response to surging meat costs. But they also were hit by the surge in crude oil prices and the weak Japanese currency, and have both downgraded their forecasts for the year ending March.Soy sauce maker Kikkoman suffered an 11% drop in business profit on the year in Japan for the April-September half."Consumers in Japan are more defensive in their spending than those in other advanced economies, so our sales volume has decreased since we raised prices," President Shozaburo Nakano said. Some companies are pursuing targeted strategies to retain customers. Higher prices hurt the sales volume of Yamazaki Baking's mainstay sandwich bread. But the higher unit price, combined with the company's increased focus on cheaper products, led to revenue gains.The weak yen continues to exert heavy pressure on Japanese businesses, which import many of their materials. The yen, despite recovering from a decadeslong low of over 151 against the dollar, still trades for over 15 more to the dollar than a year earlier."Higher prices only cover around half of the increase in material costs, and we will continue to face a difficult situation," Lotte President Eiichi Gochou said. Other than raising prices, 59% of companies in the recent survey said they will diversify suppliers to help absorb costs.Beverages company Kirin Holdings said it is considering sourcing ingredients from various countries. Ajinomoto will cut logistics costs by handling distribution with other companies through F-Line, a logistics provider it established with four other food businesses. With inflation outpacing wages, consumers continue tightening their purse strings. Real wages fell on the year for the seventh straight month in October, data from Japan's labor ministry shows. Household spending on food shrank on the year in real terms that month for the first time in three months, by 0.4%, a survey by the internal affairs ministry found. Rising food prices will deal an annual blow of 68,760 yen ($524) to each Japanese household, Teikoku Databank estimated in September, the equivalent of 2% of average consumer spending. Wage hikes that exceed the increase in consumer prices will be key to spurring more spending. Takeshi Niinami, CEO of brewer Suntory Holdings, said he will consider a 6% increase in monthly wages during Japan's annual labor negotiations in the spring.Ajinomoto President Taro Fujie also intends to address the issue. "We have a responsibility to increase wages, including through a blanket raise in base pay, using the consumer price index as a starting point," he said.