Development in consumer food prices on the Czech market in the context of food prices on the EU and world markets

Abstract

This paper discusses the development of consumer prices in the Czech Republic within the context of food prices in the European Union and the global market. The article is identifying the development of the foodstuffconsumer prices in the market in the Czech Republic in relation to World and European consumer prices. Subsequently, the development of food consumer prices in the Czech market is analyzed in relation to selected commodities and products marketed in the Czech retail chains. Lastly, the status of individual retail chains in the Czech market is defined and the consumer prices and price differences existing amongst the selected major chains operating on the Czech market are analyzed. In relation to the objectives of this article it is then possible to state the following: prices on the Czech market correlate very strongly, especially in relation to the EU countries markets, but are very weak in relation to the world market. The sensitivity of the Czech consumer prices is very high - it is very flexible towards changes within the framework of the prices levels on the market of the EU but, by contrast, it is completely inflexible in respect to the changes in the prices levels on the world market. The Czech Republic follows the general development price trends existing in the EU countries markets. The growth in food prices on the Czech market is very close to the average growth rate of the food prices index in the EU market. Regarding the prices development on the Czech Republic market, it can be noted that, in relation to particular segments of the commodity food prices, the most dynamic growth was recorded in the case of fruit and vegetables, oils and fats, dairy products, fish and seafood, poultry, beef and cereals and bakery products. It is also important to mention that in the Czech Republic there are no uniform price levels between individual regions. In respect to the nature of the Czech retail market, a comment should be made that on the one hand it is very concentrated - a relatively small number of players control the character of the market - nevertheless, but in comparison with the European average, it can be said that the market is highly competitive, since none of the market subjects clearly dominates. Individual retail chains in their pricing policies more or less follow the general price trends and tendencies, reflecting the development of the domestic market and in, particular, the EU market.