In response to rising prices, Czech consumers are adopting a simple strategy – not spending. Retail sales in September fell by a full four percent year on year, a faster decline than August’s 2.8 percent. This decline in retail sales marks the seventeenth consecutive month of decrease. In month-on-month terms, sales also dropped by 0.4 percent, according to data released by the Czech Statistical Office.
“Retail sales, after adjusting for price effects, remained lower year on year in September. The pace of the year-on-year decline deepened compared to the previous month due to a decrease in the sale of non-food goods and food. On the contrary, the sale of fuels continued to maintain sales growth,” said Jana Gotvaldová, head of the trade, transport, and services statistics department at the CSO.
Sales of non-food goods fell by 5.9 percent year-on-year, food by 4.1 percent, and fuels by 4.5 percent. Sales of motor vehicles for sale and repair also increased by 2.7 percent, but they were lower month-on-month by 1.7 percent.
Among specific segments, clothing and footwear stores recorded the most significant drop, with sales falling by 16.1 percent yearly. Sales also decreased by ten percent for stores selling household goods. Products for culture, sport, and recreation saw sales fall by 8.4 percent, computer and communication equipment by 6.1 percent, and pharmaceutical and medical goods by three percent.
“On the contrary, sales rose in stores with cosmetics and toiletry products by 12.8 percent. Sales of food in non-specialized stores with a predominance of food decreased by 4.2 percent and in specialized food stores by 1.9 percent,” added the CSO.
Analyst Tomáš Volf from Citfin company commented on the retail numbers, stating that “the fear about their financial situation in the future is too strong” for Czechs despite low unemployment and ongoing income. The unwillingness to spend is too great.
He predicts that the long series of declines may end next month, with sales possibly slightly increasing year on year, but only due to a low comparative base from last year. “However, even then, nothing will change in the overall picture. Compared to the end of 2022, this year will look only slightly better,” he added.