Overview

Data in US Dollars

Total Czech household goods spending and per capita

Sources: Czech Statistical Office, Fitch Connect

With the highest per capita income rate of any of the former communist countries of 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 2019, declining for the first time in 2020. Thanks to Covid, the Czechs saw consumer spending fall by 2.2 percent, which was the result of government health ad safety measures that included closing retail stores. Consumers could shop online, but eCommerce could not fully compensate for traditional brick-and-mortar sales.

Leading Sub-Sectors

• Cosmetics/Beauty Products

The Czech Republic cosmetics market experienced notable changes during the Covid crisis throughout 2020 and into 2021. Sales in some of the product categories declined, while other categories encountered strong growth. Obvious winners in the early days of the pandemic were hygiene products including soaps and disinfectants. On the other hand, in the first half of 2020 with the move to home office options and limited social events, the sales of decorative color cosmetics took a serious hit. While eye products gained traction later in the year, sales of lipsticks were challenging given face masks requirements. Most of the general skincare habits were left unchanged throughout 2020, with the exception of cleansing skin 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 has been gaining ground in Czech households. With limited/closed store options, customers started to order more cosmetic products on-line, the sales of which saw double-digit growth and continue to be strong despite stores reopening. And with much of the market moving online, Czech customers sought out and discovered new smaller companies offering niche natural clean cosmetic brands which have been of increased interest.

The reputation of the United States as a source of high-quality and innovative products enhances opportunities for U.S. cosmetics firms.

U.S. Commercial Service Prague offers presentation opportunities for U.S. companies at Prague FOR BEAUTY (formerly World of Beauty and Spa) show every year in September/October.

• Textiles & Apparel and Footwear

Expenditure on clothing and footwear in the Czech Republic in 2020 was one of the most significantly affected by the Covid-19 pandemic and fell by 18.6% year on year (USD 4.53 billion in 2019 to USD 3,7 billion in 2020). While most restrictions were lifted in 2021, it is not expected to be enough to bring households’ clothing and footwear spending back to pre-Covid-19 levels. Expenditure on clothing and footwear as such is expected to grow by 8.9% in 2021 reaching a total of USD 4.03 billion. A full recovery in clothing and footwear spending is expected in 2022, as the country vaccinates more of its population and consumers have more confidence in returning to retail outlets.

It is estimated that spending on clothing and footwear will increase by 16.5% year-on-year in 2022 to a total of USD 4.7 billion.

• Pet Products

Two-thirds of Czech households report having some kind of pet (~2 million households have a dog at home, 1,5 million have a cat and ~1 million have some other pet at home – mainly fish, birds, hamsters, guinea pigs, rabbits). The number of animals per capita in the Czech Republic is one of the highest in Europe. Import of pet products to the Czech Republic grew (by 18% last year), however imports of U.S. pet products to the Czech Republic is still limited.

• Furniture & Home Furnishing

Household spending on furniture and equipment rose 1.38% year-on-year in 2020 compared to 2019, despite COVID-19 constraints, from USD 2.43 billion to USD 2.46 billion and is expected to rise again to USD 2.58 billion, according to available data.  With growing consumption and exports of furniture, furniture imports are expected to grow from last year’s USD 1.09 to this year’s USD 1.2 billion. Domestic manufacturers account for USD 0.83 billion of the expected USD 2.024 billion in furniture sold in the Czech market while 59% of the furniture is imported, mainly from Europe and then from Asia.

Opportunities

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 also for e-commerce.

U.S. Commercial Service Contact:   Vilem.Fuksa@trade.gov