Czech Consumers Employ Frugality as Retail Sales Decline for Seventeenth Consecutive Month

Faced with escalating prices, Czech consumers are adopting a conservative approach, leading to a notable strategy of reduced spending. In September, retail sales witnessed a significant year-on-year decline of four percent, surpassing the 2.8 percent drop recorded in August. This marks the seventeenth consecutive month of decreasing retail sales, according to data released by the Czech Statistical Office.

Jana Gotvaldová, Head of the Trade, Transport, and Services Statistics Department at the CSO, commented on the decline, stating, “Retail sales, after adjusting for price effects, remained lower year on year in September. The pace of the year-on-year decline deepened compared to the previous month due to a decrease in the sale of non-food goods and food. On the contrary, the sale of fuels continued to maintain sales growth.”

The breakdown of specific segments reveals a substantial drop in sales, with clothing and footwear stores experiencing the most significant decline at 16.1 percent year-on-year. Stores selling household goods recorded a ten percent decrease, while products related to culture, sport, and recreation saw an 8.4 percent fall. The sale of non-food goods declined by 5.9 percent year-on-year, while food and fuels recorded drops of 4.1 percent and 4.5 percent, respectively.

Notably, stores specializing in cosmetics and toiletry products bucked the trend, experiencing a 12.8 percent increase in sales. However, sales of food in non-specialized stores with a predominance of food decreased by 4.2 percent, and specialized food stores saw a 1.9 percent decline.

Analyst Tomáš Volf from Citfin company attributed the sustained decline in retail numbers to consumer fears about their financial future, despite the country’s low unemployment and ongoing income. The reluctance to spend remains pronounced, and Volf predicts that the long series of declines may only see a potential end next month, with sales possibly slightly increasing year on year, driven by a low comparative base from last year. However, he emphasized that the overall picture is unlikely to change significantly, and the year-end outlook for 2022 remains only marginally better compared to the previous year.

Article by Prague Forum

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