Czech Republic Retail Report Q4 2012

The Czech Republic Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on the country's economic outlook of high unemployment and ongoing fiscal austerity.

The report examines how best to maximise returns in the Czech retail market while minimising investment risk, and also explores the impact of the increasingly precarious looking eurozone macroeconomic environment on the Czech consumer and on the ability of producers and exporters to realise returns in the short term.

The report also analyses the growth and risk management strategies being employed by the leading players in the Czech retail sector, as they seek to maximise the growth opportunities offered by the local market.

Czech per capita consumer spending is forecast to increase by a modest 10% to 2016, compared with a regional growth average of 44%. The country comes second (out of 10) in BMI's Central and Eastern Europe (CEE) Retail Risk/Reward Ratings, and notably outperforms for Risk.

Among all retail categories, mass grocery retail (MGR) will be the outperformer through to 2016 in growth terms, with BMI forecasting sales to expand by almost 19%, from US$15.57bn in 2012 to US$18.48bn by 2016. Through to 2016, we expect the proportional contribution of supermarkets and hypermarkets to remain dominant, with premiumisation momentum expected to pick up in line with the pre-crisis trend.

In the competitive arena, BMI sees upside potential in the fact that the Czech Republic, which joined the EU in May 2004, has a reasonably open economy compared with some neighbouring CEE markets, and some companies from outside the region continue to transfer parts of their business to the Czech Republic to reduce costs and take advantage of the domestic market.

Over the last quarter, BMI has revised the following forecasts/views:

?? BMI is holding to its forecast for the Czech Republic to avoid a full-year recession in 2012, and forecasts economic growth of 0.1% before recovering to 1.3% in 2013. A combination of fiscal austerity and uncertainty surrounding the future of the eurozone, to which the Czech Republic is heftily exposed, will mean government consumption, household consumption and investment spending pose net drags on growth this year.

Czech Republic Retail Report Q4 2012 © Business Monitor International Ltd Page 6 ?? Data released by the Czech Statistics Office (CZSO) show that household consumption contracted for the fifth quarter running in Q112 at -2.9% y-o-y, following a 0.7% drop in Q411. This translated to a net drag on growth tantamount to 1.3 percentage points (pp). BMI expects that Czech consumer spending will fall by 3.2% in 2012, posing a 1.5pp drag on economic growth.

?? The weak situation of the consumer can be seen in retail trade data released by the CZSO, which show that working day-adjusted retail sales dropped by 4.1% y-o-y in April 2012, a 2.1% monthly contraction. With consumer sentiment firmly in negative territory and heading lower, BMI expects retail trade to head deeper into the red in 2012.

Table of contents

Chapter 1 - Executive Summary

SWOT Analysis

Czech Republic Retail Business Environment SWOT

Czech Republic Political SWOT

Czech Republic Economic SWOT

Chapter 2 - Market Overview

Current Trends

Key Players

Chapter 3 - Industry Forecast Scenario

Consumer Outlook

Retail Growth Outlook

Table: Czech Republic Retail Sales Indicators, -

Table: Retail Sales By Segment, f

Macroeconomic Outlook

Table: Czech Republic – Economic Activity

Chapter 4 - Regional Retail Outlook

Central And Eastern Europe Retail Outlook

Table: Central And Eastern Europe Retail Trends, -

Table: Central And Eastern Europe Retail Sales, - (US$bn, unless stated)

Table: Central And Eastern Europe Retail Sales By % Share, -

Regional Retail Trends

Chapter 5 - Risk/Reward Ratings

Table: Central And Eastern Europe Retail Risk/Reward Ratings

Czech Republic's Retail Rating

Limits To Potential Returns

Risks To Realisation Of Returns

Chapter 6 - Mass Grocery Retail

Czech Republic Mass Grocery Retail Industry SWOT

Market Overview

Leading Retailers

Table: Structure Of The MGR Market By Number Of Outlets, -

Table: Sales Breakdown By Retail Format Type, And (% of total)

Table: Structure Of The MGR Market By Value, -

Table: Value Sales Per Outlet, e

Industry Forecast Scenario

Table: MGR Sales, -

Industry Developments

Chapter 7 - Consumer Electronics

Czech Republic Consumer Electronics Market SWOT

Market Overview

Table: Top Four Czech Electronics Retailers, Revenue - (CZKbn)

Computers

Czech Republic Retail Report Q

© Business Monitor International Ltd Page

Table: PC Sales

AV

Table: AV Sales

Table: Analogue vs Digital TV Subscribers

Mobile Handsets

Table: Mobile Communications

Industry Forecast Scenario

Consumer Electronics Market

Table: Consumer Electronics Overview

Industry Developments

Chapter 8 - Automotives

Czech Republic Autos Industry SWOT

Market Overview

Table: Czech Republic Top Key Players – Passenger Cars

Table: Czech Republic Top Key Players – Passenger Cars Jan-Apr

Industry Forecast Scenario

Table: Czech Autos Production

Table: Czech Autos Sales

Chapter 9 - Czech Republic Demographic Data

Table: The Czech Republic's Population By Age Group, - (')

Table: The Czech Republic's Population By Age Group, - (% of total)

Table: The Czech Republic's Key Population Ratios, -

Table: The Czech Republic's Rural And Urban Population, -

Chapter 10 - BMI Methodology

How We Generate Our Industry Forecasts

Sources

Related research categories

By sector: Retail (in Off-trade)

By market: Czech Republic (in Europe)