Boston, MA -- (ReleaseWire) -- 03/12/2014 -- We predict strong growth potential in the Czech retail sector over the next 5 years. We predict the recent economic struggles will continue to subdue retail spending during 2014, however this will turn around and by 2015 we see a return to growth. The strongest areas of spend are in the non-essential purchases, primarily communications, leisure and household goods. .
The Czech Republic is the second largest economy in Central Europe after Poland. Over the past few years the Czech Republic retail sector has entered a state of decline, with total spend in the sector dropping from US$113bn in 2011 to a forecasted US$94bn in 2014. 2014 is predicted to be the turnaround point and we forecast growth will return in 2015. This growth is predicted to increase over the next four years and total spend for 2018 is forecasted to reach US$131bn.
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The Czech consumer continues to face considerable challenges as the economy struggles to generate positive growth and ward off persistent economic contraction. We see a further drop in household income from US$20,004 in 2013 to US$19,761 in 2014. This decline has had ramifications on the food and drink sector which declined 1.8% from 2013. Despite these declines we are positive about the market in the near future. We predict a return to growth in 2015 and forecast an increase in net household income to US $23,916 by 2018. This will have positive ramifications in the retail sector and we predict that starting in 2015 there will be an average rate of yearly growth of 6.7%.
The Czech Republic is one of the strongest and most stable markets in the region and there is a high concentration of modern retail outlets and foreign operators.
- 2014 will be a turnaround year for the Czech retail sector. Total spend in the sector continues to decline; however, decline is slowing. We forecast a 1.07% y-o-y decline from 2013 and a return to growth in 2015 with the total retail spend growing by 7.42%.
- We forecast strong growth over the 2015-2018 period and predict a rise in total retail spend from US $94bn to US$131bn.
- The strongest predicted areas of growth in 2014 are split between two main areas - personal well-being and leisure. The education, health and housing and utilities sectors and the communications and recreation and culture sectors all experienced some of the lowest rates of decline.
Key BMI Forecasts:
- We forecast total household spending to read US$94bn over 2014, representing over 52.37% of GDP.
- Of this the majority will be on housing and utilities, representing 26.5% of total spend, US$25.0bn
- The second largest portion of household expenditure will be on food & drink, forecast to reach US $14.7bn over 2014.
- 90.6% of households will fall into the US$10,000+ category for annual incomes.
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