Czech retail trade growth accelerated by 6.4% in October, due to Christmas shopping

Czech retail trade growth accelerated by 6.4% in October, due to Christmas shopping
#Czech non-adjusted retail trade increased by 6.4% in October y/y
By bne IntelliNews December 10, 2018

Czech non-adjusted retail trade increased by 6.4% in October year-on-year, up from 1.4% in September, driven mainly by sales via mail and online Christmas orders, according to the Czech Statistics Office data released on December 7. Sales adjusted for calendar effects increased at constant prices by 5.2%.

Non-adjusted retail trade growth y/y was the second highest this year. The highest growth was of 8.2% y/y recorded in January. Sales for sale of non-food goods increased by 11.2%, sales of automotive fuel grew by 5.4%, and sales for sale of food increased by 0.7%.

Seasonally adjusted sales in retail trade, excluding motor vehicles and motorcycles, increased by 1% month-on-month in October. Sales for sale of non-food goods increased by 1.7%, sales for sale of automotive fuel increased by 0.2%, while sales for sale of food dropped by 2.6%.

“Retail sales surpassed analysts' expectations in October. Households are not afraid to spend their increasing revenues and are interested particularly in goods and services,” UniCredit Bank analyst Jiri Pour said for the Czech News Agency.

The highest increase of sales was recorded in retail sale via mail order or online (up by 24.1%). Retail sale of information and communication equipment in specialised stores was also successful (sales growth by 18.1%) as well as retail sale of cultural and recreation goods in specialised stores (up by 11.8%), retail sale of other household equipment in specialised stores (10.1%). Retail sale in non-specialised stores with food, beverages or tobacco predominating reported growth by 0.8%, while retail sale of food, beverages and tobacco in specialised stores dropped by 1.1%.

“Everything suggests that households are slowly starting to get ready for Christmas this year, which is to be even richer than last year. Households are not afraid to enjoy their income from stable wage growth,” said Komercni banka's economist Monika Junicke.

The price deflator related to the corresponding period of the previous year, excluding VAT, reached 101.3%. It was influenced mostly by higher prices of automotive fuel, dispensing chemist, medical and orthopaedic goods, cosmetic and toilet articles, food, and other household equipment. On the other hand, prices decreased in retail sale of information and communication equipment in specialised stores and in retail sale of clothing and footwear, the statistics data shows.

Seasonally adjusted sales for sale and repair of motor vehicles remained unchanged at constant prices, m/m. Sales adjusted for calendar effects decreased by 6.2%, y/y. Non-adjusted sales decreased by 3.1% y/y.

The Czech Fund analyst Lukas Kovanda expects the growth of retail sales to slow down slightly next year and significantly in 2020. Growth dynamics will reach its limits. This, for example, was demonstrated by a significant fall in consumer confidence between October and November this year, which has been the most significant since 2011. “Czechs are increasingly afraid of a deterioration of their economic conditions, and if this fear persists, it is only a matter of time when it shows a noticeable deterioration in numbers for retail,” he concluded.

Data

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