Although the furniture retailer IKEA has reduced Práva by thousands of crowns twice since the August price review, nevertheless only the Köldgrader refrigerator is the cheapest of the compared products in the Czech Republic. For the rest, you can save money abroad, often very significantly.
For example, the Idanäs bed costs 15,990 crowns in a Czech store, but in Slovakia it costs 12,210 CZK after conversion. The popular folding bed Hemnes has become cheaper, even by several thousand, but it can still be purchased in Slovakia almost two thousand cheaper.
The high price in the Czech Republic is illustrated by the differences in the prices of food at IKEA. The popular meatballs in a kilogram package cost 249 crowns in domestic stores, while in Germany it is only 220 CZK.
Because it is too expensive at home, the head of the Czech government is shopping here, writes the German Bild
At a popular restaurant in the Czech Republic, you can buy eight meatballs with sauce, mashed potatoes and cranberries for 129 crowns. In Poland, the same portion costs 88 crowns. Even in Slovakia, a portion costs less money than in the Czech Republic, and what’s more, with four extra balls.
Drogerie dm has not changed the prices of the compared products since August, so these goods continue to be cheaper abroad. In some cases by enough.
For example, a dishwasher tablet is half as expensive in the Czech Republic as compared to Germany. Listerine Cool Mint Mild mouthwash with a volume of 500 milliliters here costs 149 crowns, while in Germany and Slovakia it is around one hundred crowns and in Poland even only 60, which is two and a half times less.
World food prices have resumed their decline
The chain may not face serious competition
“It doesn’t make sense because Czechs have smaller incomes than Germans,” BH Securities Chief Economist Štěpán Křeček told Práv.
According to him, the reason lies in insufficient competition on the local market. “Stores can put a price premium on the fact that their stores are full anyway and they will sell the goods. The prices are high because people still buy the goods,” the analyst pointed out.
At the same time, he called the state’s anti-monopoly policy bad when there are chains with very high market shares in certain industries. The others no longer have the motivation to enter the Czech market. But it is also a problem to build new halls and shops or to find people.
“That’s why they’d rather go to Poland, where they can find employees more easily, give them lower wages and have no problem building a warehouse. On the other hand, it is known that the profit margin here is higher than usual in the rest of the European Union and the motivation to enter the market is great,” added Křeček.
If there is less competition for similar products in the Czech Republic, then according to Datarun economist Peter Barton, it makes sense for sellers to sell at a higher price. Czech customers are thus cross-subsidizing wealthier Germans in the overall accounting of global IKEA.
However, if the company does not produce the goods itself, but only sells them, it is possible, for example, that a supplier of drugstore goods will refuse to supply washing powder under the same conditions as, for example, German stores. Whether it is the quality or the price of the powder. “It’s actually about parceling out the markets,” Bartoň told Práv.
When will the discount come?
People have become accustomed to buying selected goods abroad because they save money. According to Křeček, this could force some local traders to cut prices, because by making Czechs buy elsewhere, they reduce the demand for overpriced goods on the domestic market.
Sales in Czech stores have been falling for the 17th month in a row, by four percent year-on-year in September. “The effect is also played by the drop in real incomes, when many have finished fixing their mortgages or utilities and are now paying more and cannot afford to buy what they were used to,” added Křeček.