Retail sales in the Czech Republic have been falling for the 11th consecutive month, with a year-on-year decline of 8.1% in March, according to data from the Czech Statistical Office. The decline in sales was also reflected in month-on-month comparisons, where sales fell by 0.7%. All categories of stores and online and mail-order businesses experienced a decrease in sales.

The decline in sales of non-food products, including household, computer and communication equipment, and cosmetic and toiletry products, is an indication of a general decrease in consumer confidence. Consumers are concerned about the current economic situation and their future financial stability, causing them to prioritize spending on essentials rather than discretionary items. Sales in stores selling cultural, sports, and recreation products fell by 3.4% year-on-year, and sales of pharmaceutical and medical products declined by 1.3%. Online and mail-order stores saw sales decline by 4%, while sales in non-specialized stores with predominantly non-food products increased by 1.8%.

Food sales also saw a decline, but by 1% less than non-food products, while sales of fuel increased by 2.4%. Sales of energy increased by 0.6%. The rise in fuel sales is attributed to increased prices resulting from the global rise in oil prices.

The decline in retail sales is driven by rising inflation in the country, which is one of the highest in Europe. Despite a slight decrease in unemployment, people are concerned about their future income, leading them to prioritize spending on essentials. This has caused retailers to struggle, leading them to fight for customers by improving prices, which could help to lower inflation.

In conclusion, the continued decline in retail sales in the Czech Republic reflects a general decrease in consumer confidence driven by the current economic situation and rising inflation. Until consumer confidence improves and the economy recovers, retailers will have to continue to adapt and fight for customers by improving prices and offering promotional offers and discounts.

Article by Prague Forum