Czech retailers brace themselves for seasonal shopping spree

15-12-2003

The huge changes that have occurred in this country over the past decade or so become even more apparent around Christmas time. Whereas before 1989, Christmas was primarily a celebration involving traditional carp dinners, with oranges being the only "luxury good" people could hope for, it is now a glitzy, commercial festival similar to that which has long been common in the West. This year, Czech retailers are expecting bumper sales for the Christmas period, as the people here go on a seasonal shopping spree.

Photo: CTKPhoto: CTK According to a recent survey by the TNS Factum agency, the average Czech consumer is expected to spend around 5000 CZK (185 USD) on Christmas gifts this year, which is a 25 % increase on the last Christmas period. There is certainly no shortage of outlets for them to spend their money thanks to the large number of hypermarkets that have sprung up in this country in the past couple of years, as major international retailers such as Carrefour and Ahold begin establishing themselves on the Czech market.

I asked Martina Cermakova, Corporate Affairs Coordinator for Tesco, which is one of the largest foreign retail chains operating in this country, whether the Christmas shopping season appeared to be living up to expectations:

"The sales are probably the same as last year. Many shops have opened in the past twelve months so competition is higher, but the average [overall] sales should be nearly the same."

The TNS Factum survey also seems to indicate that more western-style shopping habits are beginning to emerge, with Czechs now spending more money on Christmas gifts for less people. I asked Ms Cermakova whether she too had noticed changes in Czech purchasing behaviour in recent years:

Photo: CTKPhoto: CTK "Of course, since the borders have been open people have been able to compare the situation with what's on offer abroad. Their expectations have also increased so we have to be prepared for everything."

I also asked Ms Cermakova about the sorts of things Czechs were buying at this time of year and if there were any items that were expected to sell particularly well:

"The majority [of items sold] will be games for children, toys, dolls and probably some DVDs and household electronics, as well as alcohol and food in particular. People are asking for wine this year so we expect wine sales to be quite high."

The downside of this shopping spree is that many will be buying goods on credit and so will probably have to tighten their belts in the New Year. Banks, for their part, have been doing more to encourage credit cards and other types of consumer borrowing during the holiday season. Ms Cermakova said that she hadn't noticed any major seasonal increase in credit-card use in Tesco stores. She did admit, however, that hire-purchase buying could be as much as two times the normal rate, although it was still a small percentage of overall sales.

The TNS Factum survey also ascertained that people preferred to buy food and toys in hypermarkets, but would go to specialised stores for merchandise such as computer software, which they felt they would need expert advice on before choosing. Interestingly, over 20 % of the population still buy some of their Christmas items in marketplaces while 9 % now get some things over the internet.

15-12-2003