Czech non-adjusted retail trade increased by 6.1% in November 2018 year-on-year, down from 6.4% in October, influenced mostly by an increase of sales in retail sale via mail order houses or via Internet (which grew by 22.6%), according to data by the Czech Statistics Office (CSO) released on January 11. Sales adjusted for calendar effects increased at constant prices by 5.0% y/y.
Seasonally adjusted sales in retail trade, excluding motor vehicles and motorcycles in November by 1.4% at constant prices in November month-on-month. Sales for sale of food increased by 2.7%, sales for sale of automotive fuel increased by 0.8%, and sales for sale of non-food goods increased by 0.5%.
According to the ING Chief Economist Jakub Seidler, the positive figures suggest that weaker consumer confidence in November didn't really translate into curbing spending appetite.
“The fastest pace has traditionally been achieved by online commerce, but all major assortment stores have grown. Sales have also been supported by various pre-Christmas and discount special offers, such as the so-called Black Friday,” said CSO Director of Statistics Department Marie Bouskova.
Sales increased in all main assortment types of stores, retail sale of information and communication equipment in specialised stores increased by 11.7%, retail sale of clothing, footwear and leather goods in specialised stores by 7.7%, retail sale in non-specialised stores with food, beverages or tobacco predominating increased by 2.9% and retail sale of food, beverages and tobacco in specialised stores by 0.7%.
In 2018, retail sales exceeded market expectations and showed that household consumption is still main driver of domestic economy, according to analysts, the Czech News Agency reported. In upcoming months, growth rate of Czech spending will slow down, due to development of car sales.
“Since September, sales of cars have been subject to problems with new emission standards that have decreased sales of cars across Europe. Though the annual fall in new car registrations decreased in November compared to October, on average it still reached almost 10% in the EU. Thus, total car sales in November in the domestic economy fell by 3%, but after taking calendar effects into account become 6%,” said Seidler.
According to David Marek from Deloitte, demand for households is increasing mainly due to rising wages. “Unemployment has nowhere to fall, but wage growth is strong enough to keep consumption growth at a solid level. In addition, it helps reduce the household savings rate. It is evident that consumer spendings will be dominant factor of GDP growth in 4Q18,” he added.
These figures suggest household consumption will be the main growth factor in 2019.