In addition to having one of the highest inflation rates, the Czech Republic has also long experienced high price growth in the clothing and footwear sectors. Since 2015, this section has become the most expensive in the Czech Republic out of the entire European Union.
This is at least according to data from the European statistical office, Eurostat. However, in terms of average prices, there are few EU countries where clothes and shoes are cheaper.
Only Turkey, which has an inflation rate of 85%, is in Europe; otherwise, none. Eurostat’s Harmonised Index of Consumer Prices in the clothing and footwear section shows that in the Czech Republic, clothing and footwear have risen in price by almost 34 percent since 2015, by far the highest in the EU.
Second-placed Romania registers a rise of “only” 23 percent over the same period. In contrast, neighboring Poland, for example, is at the opposite pole of the statistics, with prices a tenth lower.
Czechs are still willing to pay
“The primary reason is, of course, the willingness of Czech consumers to pay and accept price increases. The Czech Republic has long had deficient unemployment, strong economic growth, and associated wage growth. The willingness to pay is thus related to the Czechs’ growing wealth. In countries where the growth in living standards and prices in the economy is slower, we will see a much lower willingness to accept price increases,” offered one possible reason, Pavel Peterka, Roklen’s chief economist.
However, he said the rise in the price of clothing and footwear could also be related to the fact that a significant part of the clothing industry and brands are based abroad. Milan Polák, CEO of Zoot, indirectly confirmed this.
“Since we primarily buy from global fashion brands, we must respect their prices. Thus, he said, ” We have already bought the Autumn/Winter 2022/2023 collection at new prices, which are about five percent higher on average,” he said.
According to Peterka, the Czech Republic is also a relatively small market and has lower purchasing power than Western countries. “This is a problem, especially for the more expensive brands that are not as strongly represented in our stores, which leads to a reduction in supply and competition and, as a result, higher prices,” he explained.
However, UniCredit Bank economist Jiří Pour pointed out that before those above 2015, the situation was the opposite. “Leaving aside the problem of inflation, in which the Czech Republic is currently the top performer, the rise in the prices of clothing and footwear is probably due to some natural catching up of price decreases from the past. Specifically, this is roughly the period from 2000 to 2014, when prices of clothing and footwear fell steadily,” he said.
“Compared to 2000, the prices of these goods are still 3.3 percent lower today, while the EU average is 18.4 percent higher and in Slovakia even 25.5 percent higher,” Pour added, adding that in Poland, on the other hand, the decline is as much as 52 percent.
We are still among the cheapest
Despite the significant price increases in recent years, the average clothing and footwear prices in the Czech Republic were not exceptionally high last year compared to other European countries. According to Eurostat’s price level index, prices in the Czech Republic in 2021 were 7.1 percent lower than the EU average.
We were the seventh cheapest country in the EU27 ranking. Croatia, Poland, Spain, Hungary, Romania, and Bulgaria were better off. “The most expensive countries in this respect are Iceland, Denmark, Switzerland, and Norway,” Pour concluded.
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