Fast Market Research recommends "Czech Republic Retail Report Q1 2014" from Business Monitor International, now available
Boston, MA -- (SBWIRE) -- 12/19/2013 -- We believe the Czech Retail sector has strong growth potential over the next few years, particularly in the fashion and household goods sectors. As household spending increases and incomes grow we expect to see a rise in aspirational purchasing of non essential luxury items, as well as higher end, big name brands acquisitions across all sectors.
The Czech Republic is the second largest economy in Central Europe, after Poland. The Czech retail market has achieved strong growth over the past few years as disposable incomes rise, access to credit becomes easier, the number of modern retail outlets and shopping centres increases and car ownership grows. The market is expected to expand steadily throughout the forecast period, with EU membership since 2004 and substantial foreign direct investment driving growth. These trends are likely to lead to the value of the retail segment growing by 11% during the forecast period, from a predicted CZK900.76bn (US$86.80bn) in 2013 to CZK997.23bn (US$96.10bn) by 2017.
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The Czech consumer continues to face considerable challenges as the economy struggles to generate positive growth and ward off persistent economic contraction. Fiscal austerity and unemployment continue to place downwards pressure on private consumption and household spending, although consumer confidence showed signs of improvement throughout 2013. This has important ramifications for the country's food and drink sector, with subdued spending power a considerable threat to sustainable growth in coming quarters. However, with continued improvement in consumer confidence and a possible relaxation of fiscal austerity measures, we are positive that the country will achieve a modest turnaround during 2014.
The Czech Republic is one of the most mature and competitive retail markets in the region. Compared with other Central and Eastern Europe countries, concentration in the retail sector is quite high, with the top 10 companies - all of them foreign operators - accounting for around 50% of sales.
- Czech retail sales rose for the first time in six months in April 2013, increasing 1.5% from a year earlier after a revised 3.5% contraction in March.
- The upward trend continued in May, with a 1.2% y-o-y increase in retail sales.
- However, a drop of 2.7% y-o-y was recorded in June, the latest month for which data are available.
Key BMI Forecasts:
- We forecast total household spending to read US$101bn over 2013, representing over 53% of GDP
- Of this the majority will be on housing and utilities, representing US$26.9bn
- The second largest portion of household expenditure will be on food & drink, forecast to reach US $14.8bn over 2013.
- 91% of households will fall into the US$10,000+ category for annual incomes
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