- Hans Weber
- December 7, 2023
Cross-Border Shopping Alert: Czech Consumers Discovering Significant Price Disparities in Neighboring Markets
If you’re like most shoppers focused on price, it might be wise to reconsider relying heavily on dealers within the Czech Republic. As revealed by Právo’s investigation, neighboring countries often offer significantly lower prices for both goods, including cosmetics, with variations sometimes reaching tens of thousands.
Some companies seem to have taken note that amidst the wave of news about escalating inflation, Czech consumers are less fixated on the crown currency and more willing to pay higher amounts compared to shoppers in Poland, Slovakia, or even Germany.
Petr Sklenář, chief economist at J&T Bank, pointed out, “Companies can afford it because people will buy goods at these prices.”
Právo conducted a comparative study, analyzing prices of identical products offered by Škoda Auto, IKEA, and dm drugstores in both the Czech Republic and neighboring countries. For instance, a Škoda Fabia in Ambition trim with a 1.0 MPI engine costs CZK 369,900 in the Czech Republic, while it’s CZK 15,000 more affordable in Slovakia.
The price differences persist across different products. An Octavia Ambition equipped with a 1.5 TSI engine is priced at CZK 679,900 in the Czech Republic, whereas in Poland, the same model is a whopping CZK 50,000 cheaper. Even the combi version, starting at CZK 719,900 in the Czech Republic, enjoys a nearly CZK 70,000 reduction in Poland.
In the earlier part of the year, the disparities were even more pronounced, owing to the Polish zloty’s exchange rate at five crowns compared to the present 5.43 crowns.
Buying a car from neighboring countries could translate to substantial savings, potentially reaching a hundred thousand crowns. For instance, an Octavia Combi can be purchased in Bulgaria for significantly less.
Despite this, cars continue to sell well in the Czech Republic. “Consumers are willing to pay the prices, even though there is substantial shopping tourism to Poland and Germany in the border regions,” shared Jan Fanta, an expert at EY Czech Republic.
According to Boris Tomciak, an analyst at Finlord, the price differentials are not merely a result of varying taxes but stem from the sales strategies adopted by companies.
An explanation emerges—IKEA sells the Vimle two-seater sofa bed for CZK 25,590 in the Czech Republic, whereas in Poland, it’s available at a discounted CZK 20,196, marking a fifth less. A similar pattern holds true for the popular Hemnes sofa bed with two drawers, priced at CZK 13,970 in the Czech Republic and CZK 11,449 in Poland. Similar savings can be found in Slovakia and Germany.
IKEA representatives clarify that retail organizations in each country acquire products from a shared supplier, Inter IKEA, and subsequently set their respective end prices based on various factors that consider local expenses and other influences in the specific country.
Article by Prague Forum
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- Hans Weber
- December 7, 2023