In a noteworthy shift, retail sales in the Czech Republic experienced an unexpected upturn in November, marking the first rise in 18 months following a prolonged period of decline. The Czech Statistical Office (CSO) revealed that retail sales saw a year-on-year increase of 0.9 percent, with a corresponding month-to-month rise of an equal percentage.

Jana Gotvaldova, head of the CSO’s trade, transport, and services statistics department, highlighted that the boost in retail sales was driven by non-food goods and fuels, whereas food sales continued to experience a decline, registering a decrease of 0.7 percent. Non-food goods sales exhibited a notable 1.3 percent year-on-year growth, with fuels leading the way with a substantial increase of 3.7 percent.

Certain sectors emerged as standout performers during this period. Stores specializing in computers and phones witnessed a robust year-on-year sales increase of 6.6 percent, while pharmacies and outlets offering medical goods experienced an impressive 10 percent surge. Online and mail-order businesses also thrived, posting a notable rise in sales by 5.6 percent.

However, the scenario was less favorable for stores dealing in household goods, clothing, and footwear, where sales saw a decline of 6.5 percent and 6.2 percent, respectively.

Tomas Volf, an analyst at Citfin, noted that while the year-on-year increase in sales is surprising, it should be viewed with caution. Despite the positive figure, Czech consumers remain cautious about spending, driven by concerns about their future financial stability. Volf emphasized that despite the country’s low unemployment rate, consumers are opting for essential purchases, presenting a challenge for retailers.

On a more optimistic note, BHS economist Štěpán Křeček pointed out that there are signs of improvement. “It is clear that people’s shopping appetite is gradually increasing. The situation should continue to improve, as real wages of employees will increase due to the decrease in inflation,” he added, offering a positive outlook for the retail landscape in the Czech Republic.

Article by Prague Forum