Czech Republic - Selling and buying
Reaching the consumers
60 % of consumers use a car for doing shopping and prefer going to the hypermarkets. When groceries are preferred, it is for the quality and the freshness of the products.
Credit card use has grown exponentially as bank regulations for the issuance of credit cards have been relaxed to near-Western standards.
The purchasing power of the Czech consumers, which is increasing over the past few years, is around 21,000 CZK (800 EUR per month) today.
But, the purchasing power of the active population is correlated with its education level. This means that the population which has the capacity to buy is composed of well educated persons. This induces some new consumption behaviors that are really specific. This population tends to prefer products it already knows and consumes more environmentally friendly products and bio products.
The distribution market is currently booming due to modernization of the sector and the increase of the purchasing power of the population. Czech retail business is still growing more than 4 % per year.
Small shops face stiff competition from hypermarkets and shopping malls with a broader selection, lower prices and extended weekend and evening hours. These stores have become increasingly important to the distribution mix over the last decade, attracting customers that used to purchase through traditional retailers. Swedish IKEA, British TESCO, and German OBI, Hornbach and Baumax, among others, operate multiple locations throughout Prague and have expanded throughout the nation.
Today, the distribution market in the country is dominated by UK, Austrian, and German companies which were the first ones to enter the Czech market. A majority of Czech companies have gone bankrupt or have been taken over as they lost their competitive edge. The biggest retail operators are: TESCO, METRO (Makro), AHOLD (represented by brand Hypernova and Albert), KAUFLAND, REWE (Billa, penny), LIDL (en checo), PLUS DISKONT.
Shopping centers and malls have also had great success: 80% of the population living in big cities visits them. At these centers supermarkets rub shoulders with luxury stores.
Market access procedures
Central European Free Trade Agreement (CEFTA)
International Trade Center (ITC)
Czech Republic is also a signatory to multilateral and bilateral agreements with many countries. Click here to find more information.
While the European Union has a rather liberal foreign trade policy, some products need import licenses. There are some restrictions, especially on farm products, following the implementation of the CAP (Common Agricultural Policy): the application of compensations on import and export of farm products, aimed at favoring the development of agriculture within the EU, implies a certain number of control and regulation systems for the goods entering the EU territory.
When being introduced in Czech Republic, some products must be "CE" marked in respect to the European Directives adopted on the basis of the New Approach and the Global Approach. For further information, please consult the Guide to the Implementation of Directives based on New Approach and Global Approach.
Since its accession to the European Union on May, 1st of 2004, the Czech Republic has adopted the EU Common External Tariff. The duties for non-European countries are relatively low, especially for manufactured goods (3% on average for the general rate).
In order to get exhaustive regulations and custom tariffs regarding their products, refer to the TARIC code and its database, which includes all applicable customs duties and all customs trade policy measures for all the goods.
In case of non EU countries regular customs procedure must be done so that goods could enter the market. This procedure consists from customs declaration at the customs office. This customs office assesses customs duty. Customs office may claim a money deposit for this “customs debt”. Customs debt must be paid in the given date.
As part of the "SAFE" standards advocated by the World Customs Organization (WCO), the European Union has set up a new system of import controls, the "Import Control System" (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Program eCustomer, has been in effect since January 1, 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union.
The Modernized Customs Code (MCC) of the European Union replaces existing Regulation 2913/92 and simplifies various procedures such as introducing a paperless environment, centralized clearance, and more.
Organizing goods transport
For the moment, cabotage inside the other European countries is still forbidden, because of some transitional measures induced by the accession process into the EU.