The shop closures continue

The shop closures continue

In view of the persistently weak consumer sentiment, the situation in Germany's city centres remains difficult. According to a forecast by the German Retail Association (HDE), 4,500 shops in the retail sector will close their doors for good in 2025.

"The vacancy rate in city centres is becoming more visible from year to year. The trend is dramatic. Our city centres need to become more attractive again," says HDE President Alexander von Preen.

While 5,000 shops had to close in the previous year, the HDE expects the number of shops to fall by 4,500 in 2025.

In 2015, the number of shops in the retail sector was more than 370,000; according to the HDE forecast, this figure will only be around 300,000 by 2025. The HDE sees the reasons for this development in the gloomy consumer mood and the lack of successors even for well-running shops.

In order to counteract the negative trend, the HDE believes that retailers' rental agreements must be adapted to current developments.

"More turnover-based rents need to be agreed so that the monthly payment remains affordable for retailers," emphasises von Preen.

It must also be worthwhile for companies to make investments again in the future.

"Incentives such as a special depreciation allowance for investments would help to generate private investment capital," continued von Preen.

For example, tax relief for investments in shop fitting, digitalisation, the renovation of facades and the installation of new heating and air conditioning technology would make sense.

"Politicians must now create the conditions to ensure that our city centres remain economic and social centres," says von Preen.