Retail Sales in Czech Republic Rise After a Year and a Half

In a surprising turn of events, retail sales in the Czech Republic increased in November, marking the first rise after 18 months of decline. Retail sales have increased by 0.9 percent yearly, and on a month-to-month basis, they rose by an equal percentage. The Czech Statistical Office (CSO) made these figures public on Friday.

“Sales of non-food goods and fuels contributed to the increase. However, there was still a decline in food sales,” commented Jana Gotvaldova, head of the CSO’s trade, transport, and services statistics department. Non-food goods sales grew by 1.3 percent yearly, which was even more significant for fuels (+3.7 percent). In the case of food sales, there was a decrease of 0.7 percent.

Interestingly, stores selling computers and phones recorded a year-on-year increase in sales by 6.6 percent. Pharmacies and stores selling medical goods saw an almost 10 percent increase. Online and mail-order businesses also saw a rise in sales by 5.6 percent.

However, stores selling household goods, clothing, and footwear experienced significantly lower sales, with a decrease of 6.5 percent and 6.2 percent, respectively.

According to Tomas Volf, an analyst at Citfin, the year-on-year increase in sales is a surprise, as the market was expecting a continuation of the decline. “Although today’s figure seems good, it is still just a slip on the surface. Czechs are afraid to spend for fear of their future financial situation. Even though unemployment is still the lowest in the EU, Czechs only indulge in the bare essentials. Their reluctance to spend more money in stores puts retailers in a difficult situation,” he said.

However, according to BHS economist Štěpán Křeček, the situation is starting to turn for the better. “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 said.