- Hans Weber
- December 1, 2023
Czechs Cut Costs Mostly On Food As High Inflation Continues
The retail trade in the Czech Republic is facing difficult times, as the latest report from the Czech Statistical Office (CZSO) reveals that year-on-year sales in December decreased by 7.3% in real terms. The decline was due to lower sales of both food and non-food items, with food sales falling to their lowest level since the CZSO survey began in 2001. The high inflation of food products in 2022, which reached almost 30%, has caused Czech citizens to be more mindful of what they purchase. As a result, food sales fell by 12% in specialized stores and 10% in non-specialized stores that mainly sell food.
For the full year 2022, retail sales in the country decreased by 3.6%. Products for household, culture, sports, and recreation, as well as computer and communication technologies, have been some of the most impacted sectors, with sales dropping by over 11% for household products, 10% for computer and communication equipment, and 5% for products related to culture, sports, and recreation. On the other hand, sales in stores selling pharmaceutical and medical goods increased by almost 4%.
The situation in the European Union (EU) is also not much different, with the volume of retail trade declining by 2.7% in the euro area and 2.6% in the EU in December, according to Eurostat, the statistical office of the European Union. Belgium, Denmark, and Sweden have been some of the Member States that have faced the largest yearly decreases in the total retail trade volume. On the other hand, Malta, Romania, and Spain have experienced the highest increases.
In December, the inflation rate in the Czech Republic stood at 15.8%, compared to 10.4% in the EU and 9.2% in the euro area, and 6.5% in the United States. The high inflation rate in the country is causing consumers to be more frugal, leading to a decrease in retail sales. This has created a challenging environment for businesses operating in the retail sector, who will need to find innovative solutions to maintain their sales and profitability.
Article by Prague Forum