Czech retail sales adjusted for calendar affects accelerated by 4.7% year-on-year in January from of 4.8% in December, affected markedly by e-shops and mail order services (up by 18.6%), according to the Czech Statistics Office´s data released on March 14. Y/y sales for sale of non-food goods increased by 7.8%, sales for automotive fuel by 2.9%, and sales for food by 0.9%.
Year-on-year sales increased also in retail sale of clothing, footwear and leather goods in specialised stores (by 6.6%), retail sale of dispensing chemist, medical and orthopaedic goods, and cosmetic and toilet articles in specialised stores (by 5.5%), retail sale of information and communication equipment in specialised stores (by 5.1%), and retail sale of other household equipment in specialised stores (by 0.2%).
Seasonally adjusted sales in retail trade, except of motor vehicles swelled by 0.5% month-on-month. M/m sales for sale of non-food goods increased by 1.3%, for automotive fuel by 0.9%, and sales for sale of food grew by 0.2%.
“The price deflator in retail trade, except for motor vehicles and motorcycles related to the corresponding period of the previous year (VAT excluded) was 100.4%. It was influenced mainly by higher prices of dispensing chemist, medical and orthopaedic goods, cosmetic and toilet articles, automotive fuel, food, and of other household equipment in specialised stores,” the Office reported.
“Car sales were strongly affected by new emissions norms throughout Europe in the second half of 2018. Although EU28 new car registrations are no longer falling and grew by 7% y/y, some countries including the Czech Republic experienced further double digit falls (-17% y/y in CZ). February data suggests that the situation in the Czech economy is also gradually stabilizing, with the y/y figure weakening further to just 7%,” said ING Chief Economist Jakub Seidler.
On the other hand, prices went down in retail sale of information and communication equipment in specialised stores, retail sale of clothing, footwear and leather goods in specialised stores, and in retail sale of cultural and recreation goods in specialised stores.
Seasonally adjusted sales for sale and repair of motor vehicles rose by 0.4% at constant prices m/m. Year-on-year sales went down by 5.1% for both adjusted and non-adjusted for calendar effects. Sales for sale of motor vehicles dropped by 5.7% y/y.
“This year, a further moderate slowdown in retail sales growth can be expected - due to weaker economic growth and slightly weaker wage dynamics. Retail sales might also be affected by the fact that households are signalling their intention to save more, amid concerns about the economic outlook,” Seidler predicted, adding that data on the structure of household consumption in 4Q18 indicates that households are slightly reducing their spending on goods and increasing spending on services.
“This might be due to demand for some goods becoming saturated and so households using their higher income for services. This combination of factors should lead to slightly weaker retail dynamics this year and we estimate a level of 4%. However, total household consumption should still be one of the main factors supporting domestic economic growth this year and should remain solidly above the EU-average, as in recent years” he concluded.