Series of bankruptcies in retail

More stores closed than ever before

In some shopping streets, every eighth store is closed. City centers are in danger of becoming deserted.

(Bild: Wenzel Markus)

Empty shop windows instead of shopping fun in more and more cities in Germany. Up to 15.6 percent of stores are closed, more than ever before! Only 39 percent of retailers expect to make a profit this year. Less bureaucracy and a ban on Chinese online retailers could still save the red-white-red sector.

It's now "no more fun, we have to turn a number of screws, otherwise the city centers will collapse," warns Hannes Lindner, head of the consultancy Standort+Markt, against the desolation of the city centers. His analysis of the 20 largest and 16 smaller towns shows a massive increase in vacancies. On average, the figure is 5.5 percent in the large municipalities and as high as 15.6 percent in the smaller ones, a further increase of 0.7 percentage points. "This is an absolutely worrying level," adds Rainer Will, head of the German Retail Association.

Retail consultant: "We're slowly running out of humor"
Corona, drastic cost increases in rents, energy and wages, the weak consumer mood and the boom in online retailers have led to a wave of bankruptcies. Recently, Leiner, Pepco, Esprit and Görtz, for example, have closed, while others such as Palmers are reducing the number of their locations. In recent years, many catering businesses have moved into former retail spaces as a fallback solution, but this has now almost been exhausted, says Lindner. "We're slowly running out of charm. There is also the question of how many doctors' surgeries and other service providers we still need in the ground floor zones." 

As a result, the total retail space has actually been decreasing since 2018. Last year, there was only a mini increase on paper due to a major opening in Vienna-Meidling (Vio Plaza), but the trend is clearly pointing downwards. The fashion sector in particular "has partially died out, with 123,000 square meters having been lost since 2014 - that's 20 percent," calculates expert Lindner. Although fashion is the strongest retail sector with 26.2 percent of all space, years ago it still accounted for a third of all space. 

The vicious circle of fewer stores and therefore less attractiveness of city centers for customers, including further declines in sales, must be broken. According to surveys, consumers value public toilets, quiet zones, cleanliness, safety and good accessibility - including by car.

To this end, there must finally be significant relief for local business people, urges trade association boss Will. Because: "107,000 jobs are at stake. Only 39 percent of retailers expect to make a profit this year, 18 percent want to close stores."

(Bild: Krone KREATIV/stock.adobe.com)

In concrete terms, what is needed is an uncompromising reduction in bureaucracy and non-wage labor costs. Will knows: "At 32% of gross pay, we are the best in Europe." Abolishing the rental contract fee could also help. And action must finally be taken against online stores from China. We spent an estimated 1.5 billion euros on Shein and Temu in 2024, even though they do not adhere to health or other standards.

Blocking Shein and Temu due to health hazards?
Will warns consumers: "They are getting shoes with ten times the lead content permitted in the EU, which enters the body via the leather." Either the parcels should be checked more closely or the Chinese stores should be temporarily banned. "They are repeat offenders; according to the EU's digital directive, a fine of six percent of their global turnover would be possible." A ban is possible, France already enforced this against Wish years ago.