Inflation has started to slow down since the first half of the summer year, as consumers are still cautious and reluctant to spend more. This overall led to a decrease in consumption, i.e. the volume of goods sold: in the first quarter of this year, the decrease was 3.8 percent, and in the second even 4.9 percent.
In a detailed view, it can be seen that over the last five months, consumption has decreased by around t percent. Thus, prices will rise more slowly to support the new growth in consumption, predicts Karel Tra, general editor of NIQ for the Czech Republic, Slovakia and Hungary.
According to the NIQ analysis, prices in Czech Republic have increased by 23 percent since the start of the pandemic. That’s the same growth we’ve seen over the past 12 years, according to NIQ experts.
In your inflationary trend, the Czech household relies on two etc strategies: on private signs and on promotional events.
According to private signs, over the last year and a half it has grown dramatically and achieved new wines. Last year, according to private figures, it was 24 percent, in the first quarter of this year it is 26 percent. Although the pace of growth has slowed down a little, private brands compete with traditional products, mainly due to their reasonable price.
For promotions, there is a growing trend to go bolder. esk households are increasingly looking for new goods, and merchants are going against this trend. The result is that in the last quarter two-thirds of all goods in Czech supermarkets and hypermarkets were bought on sale.
Last year, I discussed the fact that the limit of ten percent of goods sold in events could be broken, and we are at fifty percent. This is evidence of the growing preference of Czech consumers for the current offer, for Karel Tra.
Consumers therefore go for cheaper product variants. This trend, called downtrading, is manifested in roughly half of the food products. Examples are mayonnaise, tabulok okolda or soluble flowers, including Tra and dov, and in other categories, despite the inflationary environment, this year they are reaching for expensive products as well. This happens in the categories of beer, potato chips, cola drinks and the like, adds the expert.
For some categories, such as flour and oils or spirits and carbonated soft drinks, there was a significant volume decrease. This raises questions regarding other many factors, such as limited shopping in the collection or the use of previous collections.
According to the NIQ, cross-border purchases, especially in Poland, will be reached in the future. Tra claims that this has to do with the fact that one of the big banks in the Czech Republic has published data on the prevalence of this phenomenon. The average number of payments in Czech Republic with cards issued for food in Poland is eightfold in 2019, according to Karel Tra.
In Poland, even 30 percent is suitable for some foods. Don’t go there for cheese, yogurt and baby diapers. Purchases of cigarettes, including electronic ones, are no exception. Cigarette sales in Poland began to decline in 2022, and this trend continues this year as well. Those who shopped at Polish neighbors a year ago, go there still, to Tra.