Retail affected

More and more store ruins in Austria’s city centers

Last year alone, 9,000 square meters of retail space were lost in Austrian cities. Offices, fitness studios, doctors and pubs are moving in instead. As a result, it is becoming less and less interesting for customers to stroll through the city - and this expenditure is then lost to retailers.

Window panes covered with stickers, lowered roller shutters, stores without furnishings or goods - more and more stores in Austria are having to close. It often takes years before new tenants are found for the empty spaces. First the pandemic, then high inflation and the resulting real estate crisis have fueled a development that is having an unmistakable impact on Austrian city and townscapes. It is becoming less and less interesting for customers to stroll through the city center and go window shopping.

Most of the former store spaces are becoming offices.(Bild: stock.adobe.com, Krone KREATIV)

"Retail space shows how consumer behavior is changing," explains Rainer Will, head of the retail association. In 2023 alone, 9,000 square meters of shopping space will be lost. Fashion stores are particularly affected. Fashion still accounts for almost 50 percent of total retail space in city centers, but more and more customers are migrating to international online giants. "The clothing industry has lost 100,000 square meters of retail space in the last decade and has really eroded," reports Hannes Lindner, Managing Director of the consulting firm Standort + Markt, which takes a close look at the changes in cities, shopping centers and the like every year.

State capitals affected differently
 There are now not many shopping streets that have developed positively. The winners of the last ten years in Vienna include Landstraßer Hauptstraße (+6.5 %), the 1st district (+2.7 %), Meidlinger Hauptstraße and Favoritenstraße (+1.1 %) and Meidlinger Hauptstraße (+0.5 %). Consumers also have more choice in Dornbirn (+5.9%), Amstetten (+2%) and Leoben (+1.4%). There are fewer stores in St. Pölten (-28.1 %), Wiener Neustadt (-20.9 %), Steyr (-17.3 %), Krems (-14.8 %), Villach (-10.7 %), Graz (-7.7 %) and Klagenfurt (-7.0 %), among others. Innsbruck, Linz, Bregenz and Eisenstadt escaped with a black eye without much change. In Salzburg, the decline amounted to 1.9%.

Instead of retailers, other sectors are moving into the vacant stores. Offices, social facilities, storage space and doctors' surgeries have recently become more common (see chart above). Banks are increasingly closing their branches, while beauty salons and fitness studios are also moving in. Local businesses that used to frequently step in as new tenants are now retreating to cheaper locations. "The dreariness when you walk through the city centers is not getting any better for customers," fears Lindner, who expects store space to shrink further in the coming years. Vacancies are increasing throughout Austria. 

Many no longer expect profits
"Walk-in customers are migrating to the internet," reports trade association boss Will. The money is missing from retailers' tills. 35 percent of store operators fear they will make a loss this year. In comparison: only a good quarter expect profits. As a result, 18 percent have called a halt to expansion this year and one in ten operators are planning to close stores. Eleven percent want to end their business activities this year. Small and medium-sized businesses are under particular pressure. In this segment, as many as twelve percent want to close this year.

In order to remain competitive, many businesses need to specialize, offer additional services and better coordinate their activities on site and online, advises consultant Lindner.