Czechs stop shopping. Retail sales fell for the third month in a row

Czechs only bought more medicines and medical supplies, other goods are falling behind. It also saves on food. Sales slumped into 2019.

The year-on-year decline in retail sales accelerated in July, and to 7.2 percent from June’s 6.9 percent. This is due to lower sales of fuel, non-food goods and food. Retailers’ sales are falling in the Czech Republic for the third month in a row. This follows from data published by the Czech Statistical Office (CZSO). Month-on-month, retail sales were up 0.6 percent.

“Consumers were more interested than last year only about pharmaceutical and medical goods, in other types of stores, sales decreased,” said Marie Boušková, director of the CZSO Trade Statistics Department. Online stores recorded a decrease in sales for the seventh month in a row, she added.

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According to the Chief Economist of Creditas Bank Petr Dufek, Czech households are currently buying just as many goods as in 2019.

Inflation is to blame

“Because of spending cuts is primarily extreme inflation, which reduces the purchasing power of the population, and which is far from compensated by the development of wages and other incomes. Inflation, together with concerns about the further development of the economy, continues to be reflected in the negative mood of consumers,” said Dufek.

Purchases that can be postponed are being postponed, as confirmed by current retail statistics. Electronics, which households significantly stocked up on during the lockdowns, also recorded a decline. High prices are also the reason for the decline in sales of fuel, and even clothing and footwear, whose sales are far from reaching the volumes of 2019.

It also saves on food

Sales also fell for food vendors, down 7.9 percent compared to last July.

What to expect next? “Restrictions on purchases by Czech households will continue in the coming months. Falling purchasing power, together with concerns about new energy price lists, leads to caution, which is reflected in the results of not only retail, but also other services used by households. The slowdown in demand could then force some merchants to more visibly discount especially seasonal goods,” said Dufek.

UniCredit Bank economist Jiří Pour agrees. “In the coming months, expect continued declines in sales in stores of products for culture, sports and recreation or in electronics stores, and car dealers probably won’t do well either. In the second half of this year, we expect the Czech economy to go through a technical recession due to weakened domestic and foreign demand,” he said.

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The article is in Czech

Tags: Czechs stop shopping Retail sales fell month row

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