The Czech Republic’s retail sector experienced a prolonged period of decline, with October marking a year and a half of continuous decreasing sales for retailers. Despite a year-on-year fall of 1.4%, the decline slowed down compared to September, where sales dropped by 4.3%, according to data from the Czech Statistical Office (ČSÚ). However, a month-on-month comparison revealed a 0.6% increase in sales, indicating a slight recovery.

The decline in sales affected both food and non-food goods. Food product sales dropped by 2.7% compared to the previous October, while non-food items saw a 1% decrease. Interestingly, fuel sales witnessed a slight increase of 0.8%. In a month-over-month analysis, non-food item sales grew by 1.6%, food sales remained stagnant, and fuel sales declined by 2.1%.

Jana Gotvaldová, head of the ČSÚ’s trade, transport, and services statistics department, noted that all types of stores, excluding those selling cosmetics and toiletries, recorded a decrease in sales. Clothing and footwear stores experienced a significant year-over-year decrease of 6.1%, with declines also observed in sales for computer and communication equipment (3.1%), household goods (2.9%), pharmaceutical and medical goods (2.2%), and cultural, sports, and recreational goods (1.9%). In contrast, cosmetics and toiletries stores saw a revenue boost of 5.9%.

Internet and mail-order businesses stood out with a year-on-year increase in sales by 5.3% in October. Notably, sales of food in non-specialized stores with a focus on food decreased by 2.7%, while specialized food stores saw a 2.4% decline. However, non-specialized stores with a focus on non-food goods experienced a significant sales increase of 7.8%.

Analyst Tomáš Volf of Citfin expressed surprise at the year-on-year drop, emphasizing that last October’s sales had plummeted by 10.4%, marking the worst result in Czech history. Volf predicts that consumer spending in the Czech Republic may witness an uptick in the second half of the following year, citing factors such as lower interest rates, robust foreign demand, and increased consumer confidence in financial stability as potential contributors to the improvement.

Article by Prague Forum