Overview
With the highest per capita income rate of any of the former communist countries in central and eastern Europe, the Czech Republic continues to attract significant interest from foreign retailers, with many globally recognized firms now dominating the country’s retail market. Since 2000, household consumption expenditures have increased every year until they declined for the first time in 2020. In 2021, household consumption expenditures returned to positive territory. Spending on household goods grew by an estimated 5.5 percent in 2022.
Total Czech household goods spending per capita (US$, thousands)
|
|
2019 |
2020 |
2021 |
2022 |
|
Household goods spending in bn |
8,790 |
8,737 |
9,405 |
9,750 |
|
Spending per capita |
823.88 |
816.55 |
878.97 |
900.27 |
|
Population in millions |
10,669 |
10,700 |
10,700 |
10,830 |
Units: $
Sources: Czech Statistical Office, Fitch Connect
Leading Sub-Sectors
Cosmetics/Beauty Products
The cosmetics market experienced notable changes during the Covid crisis. Sales in some product categories declined, while other categories encountered strong growth. Obvious winners in the early days of the pandemic were hygiene products including soaps and other anti-bacterial products. However, the sales of cosmetics declined as more people moved to home offices and isolated themselves from social events. While mascara and eye shadow, for example, gained traction, sales of lipsticks declined due to face mask requirements. Most skincare routines were left unchanged through 2020, except for cleansing products such as tonics, cleansing waters, make-up wipes, which saw a decline in demand. With the closing of salons, the market saw increased interest in home hair coloring products.
Despite the Covid crisis, the men´s cosmetics segment gained ground in the Czech Republic. With limited/closed store options, customers started to order more cosmetic products on-line. Sales saw double digit growth and continue to be strong despite stores reopening. With the movement online, Czech customers discovered new niche natural clean cosmetic brands. The United States has a strong reputation as a source of high quality and innovative products. U.S. Commercial Service Prague offers presentation opportunities for U.S. companies at Prague’s FOR BEAUTY show (formerly World of Beauty and Spa) every year in September/October.
Textiles, Clothing and Footwear
The Czech textile, clothing and Footwear retail market has experienced consolidation during the past few years, with large multinational brands driving smaller or independent retailers out of the marketplace. Expenditure on textile, clothing, and footwear in the Czech Republic in 2020 fell by 18.6 percent year on year to approximately $4 billion in 2020. In 2021, however, the spending in this segment started to recover as Covid-related restrictions were lifted. A return to the office and social gatherings aided this trend. Spending on textile, clothing and footwear in 2022 continued its solid growth (13 percent) to approximately $5.7 billion.
Pet Products
The number of animals per capita in the Czech Republic is one of the highest in Europe. Almost two thirds of all households in the Czech Republic have a pet: 2.2 million households have a dog, 1.3 million households have a cat; and one million households have some other kind of pet - fish, birds, hamsters, etc. The pet products sector is therefore strong and continues to grow. Imports of pet products to the Czech Republic grew by 13.2 percent last year; however, imports of U.S. pet products to the Czech Republic are still limited.
Furniture & Home Furnishing
Household spending on furniture and home furnishings rose 11 percent in 2022 due to changes in customer buying behavior resulting from the pandemic. Sales of furniture naturally increased as more and more people worked from home. IKEA remains the market leader in the household goods and furniture segment, operating four stores and several other delivery points in the Czech Republic.
Opportunities
The Czech Republic continues to attract significant interest from foreign retailers, with many globally recognized firms now dominating the country’s retail market. A strong and stable economy with one of the highest household incomes in central and eastern Europe will ensure this continues during the current energy crises. The market, however, is expected to become increasingly competitive, with consolidation likely to occur in most sub-sectors. American products are generally very popular for their excellent reputation for quality, innovation and fashion trends. The growing use of the Internet in conjunction with a well-educated population makes the Czech Republic an attractive market for eCommerce in this segment.