Retail sales in August rose by 4.1 percent year on year. This is the sixth growth in a row, compared to four percent in July, August growth is slightly faster, but slower than in previous months, starting in March. The growth in August was mainly due to online stores, whose sales rose by 20.6 percent year on year, thus maintaining high growth. Sellers of building materials also did well. This follows from data published today by the Czech Statistical Office. Retail stores were not restricted by anti-pandemic measures this year or last August. Traders ‘sales in August fell short of analysts’ estimates.
“Consumers bought more non-food goods, while food sales decreased. Sales to online stores grew the most, by more than 20 percent, double-digit growth was also recorded in stores with household products, especially stores with building materials,” said Marie Boušková from the CZSO Revenues from the sale of non-food goods were 8.9 percent higher in August than a year ago, revenues from fuels were 1.9 percent higher, and revenues from food fell by 1.2 percent.
This year in August was one working day more than last year in August. Excluding adjustments, sales rose by 5.1 percent year on year. Sales of non-food goods increased by 10.7 percent and sales of fuels by 3.3 percent. On the contrary, they fell by 1.5 percent for food.
In addition to online stores, all types of specialized non-food stores also showed an increase. Sales of stores with computer and communication equipment increased by 14.6 percent, with household products by 10.2 percent, with pharmaceutical and medical goods by 7.8 percent, with cosmetic and toilet products by 4.9 percent, with clothing and footwear by 4.6 percent and with products for culture, sports and recreation by 1.8 percent. Food vendors were successful in specialized stores, whose sales increased by a percentage. On the other hand, 1.6 percent less was earned in non-specialized stores with a predominance of food.
Retail sales do not include sales and repairs of motor vehicles. In August, they fell by 3.6 percent year on year. Excluding calendar effects, they were lower by 0.2 percent, while sales of motor vehicles, including spare parts, decreased by 1.6 percent. On the other hand, sales of vehicle repairs rose by 5.4 percent.
Month-on-month, sales rose by 0.3 percent. Sales of food increased by one tenth of a percent compared to July, and that of non-food goods by 0.7 percent. On the other hand, sales of fuels to traders fell by 1.5 percent compared to July.
Traders ‘sales in August fell short of analysts’ estimates
Retail sales in August lagged behind analysts’ estimates, and will grow rather slowly in the period ahead. Nevertheless, household consumption should remain a support for the Czech economy this year. In the second holiday month, the decline in car sales was not surprising, economists do not expect improvements in the near future. The problem is subdued production, not a drop in demand. This follows from the statements of analysts that ČTK addressed today.
According to the Czech Statistical Office, sales to traders in August, after adjusting for calendar effects, increased by 4.1 percent year-on-year. Excluding seasonal effects, they rose 5.1 percent from last year. According to Komerční banka economist Michal Brožka, this is not a completely bad figure, but significantly more was expected. “The median of analysts’ estimates was 7.5 percent, and we estimated a rate of 8.2 percent,” he said.
In the eighth month of this year, seasonally adjusted car sales fell by 3.6 percent year on year. According to Jakub Seidler, chief economist of the Czech Banking Association, there is a shortage of new cars in this sector as a result of production outages. “This is also evident in the new car registrations, which then fell by 16 percent in September,” he said. On the contrary, according to him, the dynamics of registrations of used cars, whose price is rising, is accelerating.
Internet retailers also performed well in August, with sales up 20.6 percent year on year. Compared to July, they were about 1.5 percent higher, according to Raiffeisenbank analyst David Vagenknecht. “Here, month-on-month growth should gradually weaken, however, we expect the share of Internet sales in total sales to be higher in the long run as a remnant of the change in consumer behavior during coronavirus,” he said.
In retail sales excluding cars, economist UniCredit Bank expects solid growth in the coming months, but at a slightly slower pace as households stop consuming deferred consumption to such an extent. “In view of the decline in consumer confidence in September and the accelerated growth of consumer prices, we expect rather slow growth in retail sales in the coming months.