Czech Republic Retail Report

Providing expert analysis, independent forecasts and competitive intelligence on the retail industry.

Report includes: BMI Industry View, Industry SWOT Analysis, Industry Forecasts, BMI's Retail Risk Reward Index, Economic Forecasts, Company Profiles and Global, Regional and Country Industry Overviews.

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Czech Republic Retail Report
Product Price
$1,295.00

BMI View: We hold a bullish view for the Czech consumer sector in 2017 on the back of strong wage growth, low unemployment and buoyant consumer confidence. The country will maintain its status as a regional outperformer in 2017, with domestic demand driving e conomic e xpansion.

We forecast that private consumption will constitute over half of real GDP growth in 2017, as the strengthening Czech Koruna, combined with weaker demand for manufacturing exports, accelerates the Czech Republic's push towards a more domestic-orientated growth model. Our Country Risk team forecast robust 3.5% expansion in private consumption in 2017, up from an estimated 3.0% in 2016. The Czech economy as a whole is expected to grow steadily over the remainder of our forecast period, registering 2.5% real GDP growth in 2017 and averaging 2.3% through to 2020.

Consumer Spending Driving Economic Growth
Czech Republic - Real Private Consumption Growth, % y-o-y Vs GDP Per Capita, USD
f = BMI forecast. Source: Czech Statistical Office, BMI

A tightening labour market underpins our optimistic view for the Czech consumer. Unemployment fell to 5% of the labour force in October 2016, which alongside Germany and the UK is among the lowest in the EU. The unemployment rate has been on an overall downward trajectory since early 2014 and this is increasingly translating into higher incomes. This is particularly the case in the country's large manufacturing sector, where job creation and wages have expanded strongly over the past three years, according to the Manufacturing Purchasing Managers' Index survey. Real wage growth averaged 3.9% in H116, lending support to our view that the rebound in private spending has further to run. While inflation is expected to tick upwards in 2017, nearing the central bank's target of 2.0%, record low interest rates will also continue to drive consumer spending.

Tightening Labour Market Boosting Wages
Czech Republic - Unemployment Vs Real Wage Growth, % chg y-o-y
Source: Bloomberg, Czech Statistical Office

High-frequency data further point towards a positive outlook for consumer-facing industries over the coming quarters. Consumer confidence remains high while retail sales (in constant prices) grew by 4.7% y-o-y in September 2016, slightly down on the two-year average of 5.4% but still well above previous lows recorded between 2012 and 2014. Czech incomes and household spending patterns are becoming increasingly characteristic of Western European markets, with retail sales set to benefit as consumers spend a higher proportion of household earnings on premium and durable goods.

Consumer Confidence Remains Strong
Czech Republic - Consumer Confidence & Retail Sales (% y-o-y)
Source:Czech Statistical Office, Bloomberg
BMI Industry View
7
SWOT
9
Retail SWOT
9
Industry Forecast
11
Headline Retail Forecast
11
Table: Total Household Spending (Czech Republic 2013-2020)
13
Table: Retail Sector Spending, % Of Total (Czech Republic 2013-2020)
14
Table: Retail Sector Spending, % of GDP (Czech Republic 2013-2020)
14
Table: Headline Retail Sector Spending (Czech Republic 2013-2020)
15
Retail Sector Forecast
17
Food, Drink & Tobacco
18
Table: Food, Drink & Tobacco Spending (Czech Republic 2013-2020)
19
Clothing & Footwear
19
Table: Clothing & Footwear Spending (Czech Republic 2013-2020)
20
Household Goods
20
Table: Household Goods Spending (Czech Republic 2013-2020)
21
Personal Care
22
Table: Personal Care Spending (Czech Republic 2013-2020)
22
Household Numbers and Income Forecast
23
Table: Household Income Data (Czech Republic 2013-2020)
24
Table: Labour Market Data (Czech Republic 2013-2020)
27
Demographic Forecast
28
Table: Total Population (Czech Republic 2013-2020)
30
Table: Population: Babies (Czech Republic 2013-2020)
30
Table: Population: Young Children (Czech Republic 2013-2020)
31
Table: Population: Children (Czech Republic 2013-2020)
31
Table: Population: Young Teens and Older Children (Czech Republic 2013-2020)
31
Table: Population: Young People (Czech Republic 2013-2020)
32
Table: Population: Older Teenagers (Czech Republic 2013-2020)
32
Table: Population: 21yrs + (Czech Republic 2013-2020)
32
Table: Population: Young Adults (Czech Republic 2013-2020)
33
Table: Population: Middle Aged (Czech Republic 2013-2020)
33
Table: Population: Urban (Czech Republic 2013-2020)
33
Industry Risk Reward Index
34
Central And Eastern Europe Risk/Reward Index
34
Table: Central And Eastern Europe Retail Risk/Reward Index, Q316
34
Czech Republic Risk/Reward Index
35
Rewards
35
Risks
36
Market Overview
38
Retail Formats
38
Clothing & Footwear
38
Household Goods
39
Electronics
39
Department Stores
39
E-Commerce
40
Drug Store/ Pharmacies
41
Shopping Centres
41
Competitive Landscape
42
Clothing & Footwear
42
Table: Selected Clothing & Footwear Retailers
42
Household Goods
43
Table: Selected Household Goods Retailers
43
Electronics
43
Table: Selected Electronics Retailers
43
Department Stores
44
Table: Selected Department Stores
44
E-Commerce
44
Table: Selected E-Commerce Retailers
44
Pharmacies
45
Table: Selected Pharmacies Retailers
45
Glossary
46
Methodology
53
Industry Forecast Methodology
53
Sources
56
Risk/Reward Index Methodology
56
Table: Retail Risk/Reward Index Indicators
57
Table: Weighting Of Indicators
59

The Czech Republic Retail Report has been researched at source and features BMI Research's independent assessment and forecasts for the retail sector. The report examines key drivers of retail sales growth and future prospects, including consumer spending and private sector investment.

BMI's Czech Republic Retail Report also examines the level of development and potential for growth of the retail sector, the commercial initiatives of major players, changing consumer demographics that influence demand and the regulatory environment. Key sub-sectors include mass grocery retail, autos, over-the-counter pharmaceuticals, computers and consumer electronics.

Key Benefits

  • Benchmark BMI's independent retail industry forecasts for Czech Republic to test other views - a key input for successful budgeting and strategic business planning in the Czech retail market.
  • Target business opportunities and risks in Czech Republic through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.

Coverage

BMI Industry View

Summary of BMI’s key forecasts and industry analysis, plus a discussion of major industry developments and a snapshot of key short-term demand-driving macroeconomic movements.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the retail sector and within the broader political, economic and business environment.

BMI Industry Forecasts

There are four separate 5-year forecast modules in the retail reports. These are:

  • Headline Retail Forecast: Total household spending (local currency and USDbn, % growth, % GDP, per capita, per household), spending by retail sector (food & non-alcoholic drink, alcoholic drink, clothing & footwear, housing & utilities, furnishings & home, health, transport, recreation, education, restaurants & hotels, personal care & insurance (local currency and USDbn, % growth, % GDP, % of total spending)
  • Retail Sector Forecast: Breakdown of Food, Non Alcoholic Drink, Alcohol, Tobacco, Clothing, Footwear, Household Goods, Furnishings, Appliances, Glass and Tablewear, Household Textiles, Consumer Electronics, Garden Toys and Pets, Home and Garden tools, Personal Care, Personal Effects Spending (USDbn, % Growth)
  • Household Income and Numbers Forecast: Number of Households (‘000, % growth); gross income per household and per capita; net income per household and per capita; tax and social contributions per capita; breakdown of household incomes – USD5000+, USD10,000+ USD50000+ (‘000, % of total); labour force, employment and unemployment (‘000, % change)
  • Demographic Forecast: Total population; Babies 0-12 months; Young Children 0-4yrs; Children 5-9yrs; Young Teens and Older Children 10-14yrs; Older Teens 15-19yrs; Adults 21yrs +; Young Adults 21-29yrs; Middle Aged 40-64yrs (‘000, % growth, male, female); Urban Population (‘000, % population); Rural Population (‘000, % population).

BMI’s Retail Risk Reward Index

BMI’s Risk Reward Indices provide investors looking for opportunities in the region with a clear country comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Market Overview

Provides a detailed country-specific analysis of the key trends and developments in the retail sector as a whole, as well as an assessment of the main drivers affecting the major retail segments including mass grocery retail, fashion, pharmacies, consumer electronics, home improvement and personal care. The market overview also considers the most effective store formats in a given country and the impact of these factors on the main international and domestic players’ development strategies.

Competitive Landscape

This provides a brief overview of the key players in each subsection of the retail sector including MGR, Fashion, Home Improvement, Consumer Electronics, Pharmacies, and Department Store chains.

Sources

The Retail Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.