BMI View: The Czech retail sector rebounded in 2015, following several turbulent year. Consumers are once again willing to spend on essential and non-essential items , owing to healthier market conditions and rising consumer confidence. Unemployment levels are also falling while household incomes should continue to increase. We forecast positive growth throughout our forecast period and expect the wider industry's performance to remain strong. Despite this, the Czech retail landscape is both mature and saturated, limiting opportunities for new entrants.
|Headline Household Spending|
|e/f = BMI estimate/forecast. Source: BMI, Eurostat|
Key Trends & Developments
After several difficult years, we forecast headline household spending in the retail sector to rebound strongly in 2016 and register 9.4% y-o-y expansion, lifting the total spending figure to USD92bn (up from USD84bn in 2015).
Communications, education and healthcare will be the three fastest-growing categories in terms of the household spending in 2016. Nonetheless, all of them will comprise just 6.4% of the total household spending.
Despite rapidly increasing incomes, the essential goods and services will continue to account for the majority of the household spending between 2016 and 2020. We forecast the essentials' share in the total household expenditures to increase from an estimated 56.7% in 2016 to 56.8% in 2020.
Spending on housing and utilities will remain the single largest category for the Czech households, increasing its overall share from 26.9% in 2016 to 27.4% in 2020.
According to a real estate advisory CBRE, the Czech Republic will see more than EUR2bn real estate investment in 2016, mostly in the commercial and retail segments.
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.
- 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.
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.
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.
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.
The Retail Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports.