News List: The end of the closed wallet trend? Czechs grow weary of saving money.

After a historic drop at the end of last year, retail sales improved in January. They almost made up for the shortfall that occurred during the covid and energy crisis. Compared to January 2019, according to Eurostat, they were only 1.4 percent lower. In addition, the sales trend in some types of stores shows that Czechs are learning to spend again.

The news can also be pleasing for the reason that it was last year’s retail failure that brought the entire domestic economy into recession.

Month-on-month growth in sales reached 0.3 percent (seasonally adjusted) in January, prompting cautiously positive reactions from analysts.

“Consumer surveys show a stabilization of the situation,” confirms David Vagenknecht from Raiffeisen Bank, although he immediately adds: “The mood of households is still unusually pessimistic.” Jakub Seidler from the Czech Banking Association admitted that “the January figures were slightly more favorable than at the end of last year ,” however, he also reminded that “households must continue to limit their consumption due to double-digit inflation and high energy prices.”

The details of the investigation by the Czech Statistical Office (ČSÚ) show that the turnover of online stores and the sale of electronics remain above the level of the last pre-crisis year. At the same time, the covid period taught the Czechs to spend more on medicines and hygiene products. In addition, Czechs have already renewed their travel style, as evidenced by data that fuel consumption has reached pre-crisis levels, and almost the same applies to car sales as well.

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Unexpectedly, the balance of restaurants, hotels and also shoe and clothing stores improved in January. The anti-pandemic measures for these sectors have almost rubber-stamped any turnaround, but they are gradually recovering and are slowly approaching the pre-crisis level – even if they are losing ten or twenty percent, respectively.

The entire retail sector would have exceeded the balance of 2019 if the Czechs had not started saving so harshly on food. Compared to last January, the real sales of supermarkets fell by an unprecedented eight percent, compared to January 2019 by 6.3 percent.

The improvement in January also helped the Czech Republic in international comparisons. The decline of the local retail trade compared to pre-crisis times was the deepest in Europe in October, November and December 2022, in January the Belgians, Italians, and especially the Slovaks and Austrians were already worse off, as they sharply curtailed consumption just at the beginning of the new year.

The data for January cannot be overestimated, especially because it is a traditionally weak month, the results of which must be confirmed in February and especially in March, when the economy starts operating at full throttle.

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