Inflation and a lack of shopping have plunged inner cities into a severe crisis. Many brands are withdrawing from the area. The situation is not only serious in rural areas, big cities are also struggling with vacancies. Fashion shops, shoe shops and jewelers are increasingly withdrawing. FOCUS online says which new dealers are now pushing into the inner cities.
The Corona crisis has hit German retail hard. Sales have collapsed and big brands have withdrawn from inner cities. While many entrepreneurs hoped for a return to normal after the pandemic ended, experts gave little chance to this scenario.
“Some still hope that classic shopping behavior will simply come back – and that it will be like it used to be. That won’t happen like this,” Max Thinius, consultant and expert on future issues, made clear last summer in an interview with the “Textile Industry” industry service.
Confusing shopping malls, the crowds on escalators and full department stores have become mood killers. This was reflected above all in the pre-Christmas business. Many traders have been left with the goods. Long queues and big crowds – like in the pre-Corona years, did not materialize.
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Customers can already see the scars from the months of lockdown in the shopping streets.
Where jewellers, shoe stores and opticians once sold their goods, kebab shops, hairdressers and Euroshops have now moved in. Large chains, on the other hand, are in the midst of bankruptcies, restructuring or downsizing branches. In addition, the vacancy rate is increasing because more and more banks are withdrawing from the cities.
But there is hope.
Dozens of brands are driving their expansion course, investing more in Germany.
The Polish textile discounter Pepco wants to open more than 2,000 branches in Germany in the next few years. A company headquarters is currently being set up in Berlin for this purpose. The company is one of the most important competitors of Tedi and Kik, with sales of over 3.5 billion euros in 17 countries in 2020.
The Japanese textile giant Uniqlo also wants to continue growing in Germany. After cautious expansion in Berlin, Düsseldorf, Hamburg, Cologne and Stuttgart, a mega store will open in Munich at the end of 2023. According to information from FOCUS online, the company also wants to move into downtown Frankfurt. Uniqlo is part of the Fast Retailing Group and generated sales of EUR 13.6 billion in 2021.
Business is also successful for the fashion chain Sinn. A good year ago, the traditional company made it out of bankruptcy. Since then, the company has continued to expand. The company had slipped into the profit zone after a restructuring. Sinn plans to open further branches in 2023.
The outdoor fashion retailer Norrona also wants to expand further in Germany. The first branch opened in Munich last year. Other locations throughout Germany are to follow.
While more and more shoe shops are fleeing the inner cities, the furniture giant Ikea is being pushed into their branches. In Berlin, for example, Ikea opened several planning offices. A branch even moved to a former Görtz store. Other locations are to follow. In these smaller branches, customers should be able to plan kitchens and bedrooms and order furniture. The goods will then be delivered to your home.
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Hardware stores have similar concepts in the drawer. The first dealers are currently clarifying the traffic situation in the inner cities in order to set up pick-up stores, explains a Frankfurt architect’s office. Customers should be able to pick up the products they book online there. For larger orders, the goods will be delivered on the same day.
“Just to say: Come and buy garters from us and take a few pens with you – it won’t be that anymore,” believes Klaus Müller, head of the Federal Association of Consumer Organizations.
“Wherever the rental price level works out, the discounters try to get into the absolute 1a locations,” explains Dirk Wichner, head of retail leasing in Germany at the international brokerage group JLL.
Aldi Süd confirms that it is “city-clear” and that it wants to close gaps in the city center as a frequency anchor. Aldi Nord argues similarly. The company confirms that it is realizing “more and more stores at central urban hubs”.
Archrival Lidl is also increasingly moving to the city. CHIP was already allowed to visit the city model in Munich on site (here the video). “We are working intensively on high-street locations at junctions with public transport connections,” said Lidl property manager Marek Franz in an interview.
The food trade is following the example of the drugstores. dm, Rossmann and Müller had already settled in the shopping streets. Experts explained that drugstores promote inspirational shopping and thus find suitable customers in shopping arcades.
If Aldi, Lidl and other discounters move into the city and into the immediate vicinity of dm and Rossmann, consumers would find a large part of their weekly shopping in one place. Thus, the discounters would increase the pressure on Rewe and Edeka, the main beneficiaries of the crisis.
The branch areas in the city are too large for discounters and small specialist shops. Considerations by real estate experts and architects see smaller mini malls as forward-looking.
In addition to electronics, fashion, shoes and books, customers could also buy kitchens, furniture, tiles, parquet floors, pet supplies and groceries in the city centre. In addition, department stores are becoming service points. In the branch areas there are gyms, hairdressers, nail salons, bowling alleys, restaurants, cinemas and offices that customers can rent. The parent company Signa had already developed a model of what the future of shopping at Galeria Karstadt Kaufhof could look like.
What is now needed are creative solutions for “new inner cities” that enable consumers to use new services and offers. In addition to trade, gastronomy and events could also play a much larger role than before.
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