Abstract:

The paper is an economic study, finding an answer to the question, how business recession may influence consumer buying behaviour. The main objective of the study is the area of retail foodstuff in the Czech Republic and the price elasticity of demand. The fact that the economic recession impacted consumers´ purchasing power has consequences in the retail foodstuff, as decreasing food consumption and the structural changes in household consumption. Czech consumers are highly cost-oriented, so the preference of cheaper and lower quality products is increasing.

Sensitivity of the changes in the groceries purchasing quantity in dependence on their prices is reflected in demand price elasticity (further only DPE). Despite the fact that the food-processing industry is generally considered to be a cyclically neutral, which means that the stadium of business cycle does not affect the demand for products of the industry, it is possible to prove considerable differences in DPE of various commodities in relation to business cycle development. The aim of the study is to prove the impact of economic development on the DPE by means of a case study on real data. The case study works with a “shopping basket”. The data for the “shopping basket” creation comes from the Czech retail foodstuff network, covering over 230 small and medium-size shops, with more than one thousand employees.