Given the persistently weak consumer sentiment, the situation in Germany's city centres remains challenging. According to forecasts by the German Retail Association (HDE), 4,500 retail stores will close their doors permanently by 2025.
'Vacancy rates in city centres are becoming more visible every year. The development is dramatic. Our city centres must become more attractive again,' said HDE President Alexander von Preen.
While 5,000 stores had to close last year, the HDE expects the number of stores to decline by 4,500 by 2025. 'The negative trend is slowing somewhat, but with every store closure, our city centres continue to lose their appeal,' von Preen continued. In 2015, the number of retail stores was more than 370,000; according to the HDE forecast, this number will fall to only around 300,000 by 2025. The HDE attributes this development to the gloomy consumer sentiment and the lack of successors, even for well-performing stores.
To counteract the negative trend, the HDE believes that retailers' rental agreements must be adapted to current developments. 'More sales-based rents must be agreed so that monthly payments remain affordable for retailers,' emphasises von Preen.
Furthermore, it must once again be worthwhile for companies to make investments in the future. 'Incentives such as special depreciation options for investments would help generate private investment capital,' von Preen continues. Tax incentives for investments in shopfitting, digitalisation, facade renovations, and the installation of new heating and air conditioning technology would be sensible, for example. 'Politicians must now create the conditions for our city centres to remain as economic and social centres,' von Preen continues.
More information:
Handelsverband Deutschland
www.einzelhandel.de