Friday, 18 April 2014

Czech retail sales fall by 0.5% in Jan

15 March 2013

Prague, March 14 (CTK) - Czech retail sales, both adjusted and non-adjusted for working days, fell by 0.5 percent year-on-year in January, compared with a drop of 4.9 percent in the previous month, the Czech Statistical Office (CSU) said yesterday.

The result was affected mainly by lower sales in the automotive segment, while a growth in the retail trade segment moderated the fall.

Adjusted for seasonal influences, sales in retail trade, including sale and repair of motor vehicles, increased by 0.4 percent at constant prices month-on-month in January.

Analysts asses the result of retail sales for January positively.

"Czech consumers love discounts. A major part of them therefore waited for January sales. In addition, a growing number of customers has succumbed to the charm of shopping via the Internet, from which they expect even more advantageous prices than in brick-and-mortar stores," analyst Pavel Kulhavy of PwC Audit said.

According to Kulhavy, it is no surprise that e-shops registered the highest increase in sale in the past more than two years. Large retail chains entered the year 2013 in black figures as well, he noted.

According to Raiffeisenbank analyst Michal Brozka, the annual decrease in retail sales by 0.5 percent is good news. In comparison with December, sales grew by 0.4 percent. "Regarding the rise of VAT we feared there would be a fall. The first January data on retail sale development signalise that the Czech economy does not have to be in such a bad condition this year. However, the deteriorating situation on the labour market will keep consumption subdued," Brozka said.

Seasonally adjusted sales for sale and repair of motor vehicles at constant prices stagnated in month-month terms, while sales adjusted for working days as well as non-adjusted decreased by 3.5 percent year-on-year.

Non-adjusted sales for sale of motor vehicles, including spare parts, decreased by 4.1 percent year-on-year, and for sales for repair of motor vehicles by 1.1 percent year-on-year.

In retail trade including sale of automotive fuel, seasonally adjusted sales at constant prices increased by 0.4 percent month-on-month, and sales adjusted for working days by 0.7 percent year-on-year, the same as non-adjusted.

Sale of non-food products grew by 1.9 percent and sale of food products by 0.1 percent, while sale of automotive fuel dropped by 2.2 percent.

The most dynamic growth was registered in sale via the Internet and via mail order houses (23.7 pct). Sale via the Internet recorded the biggest growth in 26 months.

A contribution to the overall growth came also from higher sales of information and communication equipment, pharmaceutical, medical and orthopaedic goods, cosmetic and toilet articles, and sale of clothing and footwear in specialised stores.

Retail sale in non-specialised stores with food predominating, in which big chain stores have the biggest influence, increased.

On the contrary, sale in specialised stores with food decreased, as did sale of cultural and recreation goods and sale of other household equipment in specialised stores.

The price deflator related to the corresponding period of the previous year (VAT excluded) was 99.8 percent. In comparison with December 2012 it increased by 0.3 percentage point.

An annual price increase was recorded for food and pharmaceutical, medical and orthopaedic goods, cosmetic and toilet articles, while in most of non-food goods prices continued to decrease, particularly in the segment of information and communication equipment.

As of January this year, the base for short-term statistics has changed, the CSU said.

"Besides the change in the base period at fixed-base indices (that are newly compared to the average of 2010 instead of the average of 2005) also the weighting scheme of the year 2010 was used. In accordance with the methodology of Eurostat, a back-calculation to the year 2009 was made on the new weights, which entailed a revision of fixed-base and y-o-y indices," the CSU said.

For full 2013, economists do not expect any significant changes in the consumption behaviour of Czechs. "We expect a slight revival of consumption in the second half of the year. The outlook of retailers is not therefore rosy and we fear that their sales will decrease further this year. For the entire year we expect a fall of 0.8 percent," Komercni banka analyst Miroslav Frayer said.

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