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Weak retail: Can city centers reinvent themselves?

Weak retail: Can city centers reinvent themselves?

The city centers are in crisis: thousands of retail stores are closing and the quality of life is often poor. Creative ideas are required.

The number of retail stores in Germany has been falling for years, but many city centers are primarily designed for shopping. The vacancies cannot be overlooked – new and large gaps are likely to emerge soon with further closures of Galeria branches. The German Trade Association (HDE) warned of “ghost towns” on Tuesday and called on the federal government to hold an inner-city summit. Federal Construction Minister Klara Geywitz (SPD) emphasized that the offerings in the city centers needed to become more diverse – in addition to shopping, people also wanted libraries, apartments, kindergartens and schools in the city centers.

“Monocultures are susceptible to crises. This applies not only to the spruce trees in the Harz, but also to the real estate market and inner city development,” said the SPD politician at a congress on commercial real estate in Berlin. “More diverse offerings and usage options bring stability.”

Ricarda Pätzold from the German Institute for Urban Studies (difu) advocated at the congress for being open to experimentation in the transformation of inner cities and for starting change on a small scale. It is important that people find other ways to access the city center. “For example, why isn’t the biggest and most beautiful playground in the city center?” asked Pätzold. Minister Geywitz reported on older West German shopping centers on whose roofs there used to be mini golf courses. “Today the roofs are generally not used. But I believe they still have good potential for quality of stay,” said the SPD politician.

City centers are often rated based on shopping opportunities

The reality is different in many inner cities. The same branches of large retail chains are lined up next to each other, especially in medium-sized centers. Most areas are covered in concrete and greenery is rarely found. In addition, the vacancy rate is increasing: According to a study by the Federal Institute for Building, Urban and Spatial Research, the vacancy rate in central ground floor locations in city centers rose to 8 to 10 percent in the crisis years of 2022/2023.

“Today we have not achieved the frequency level that we had in mind in 2019 and 2020. Certainly at individual locations, but not across the board,” said HDE Managing Director Stefan Genth about the number of people in the shopping streets. But it is trade that makes the city centers attractive. Current studies recently confirmed this: city centers are often rated based on shopping opportunities, and shopping and shopping are repeatedly cited as the most important reasons for visiting.

Around 60,000 fewer retail stores since 2015

And yet: According to HDE, the number of retail stores in Germany has fallen from 372,000 to 311,000 since 2015. The association expects 5,000 more closures this year. The uncertainty in the industry recently increased due to the renewed insolvency of the Galeria Karstadt Kaufhof department store group. The new owners want to take over at least 70 of the 92 branches. However, some cities have to expect that the local Galeria branch will close.

Trade Association for Grants and Settlement Managers

In the fight against the “decline of many inner cities”, the industry association now wants to hold politicians accountable. An annual summit with all those involved could improve coordination, said HDE President Alexander von Preen.

Von Preen also believes that a start-up offensive is necessary. “We also have to see the vacancies as an opportunity and encourage people to open their own business in the city center, similar to the greenfield start-up centers.” Founders should receive a subsidy for a maximum of 60 months; settlement managers could record vacancies and organize new tenants.

Living in the center?

“People want to see people,” said difu expert Pätzold on the topic of quality of stay in a city center. Trade, gastronomy, medicine, services, housing, life – all of this belongs to the city center. The ultimate question is how these uses will relate to each other in the future. Because sorted and next to each other is not possible in the limited city center. The city is also a mess.

On the much-discussed topic of living in the city center, she warned that, in addition to living space, a high level of tolerance for “inner-city impositions” was important if there was to be a lot going on in a city center.

Fundamentally, the transformation requires a different tone when it comes to inner cities. “Everyone talks about the loss of importance of the inner cities, that’s a widely shared narrative. But it’s a problem when everyone looks at the inner cities and the main thing is always whether they can still be saved,” said Pätzold.

Source: Stern

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