Retail association predicts 5,000 store closures - impact on city centers and measures to save city centers

Retail association predicts 5,000 store closures - impact on city centers and measures to save city centers

According to a report by www.n-tv.de,

Retail in this country is currently struggling with a number of problems. Inflation and the economic downturn in particular are hitting many businesses hard. The retail association HDE is again expecting large-scale stores to die this year. In total, 5,000 stores are expected to close permanently. This also has consequences for many inner cities, as the main reason for visiting a city center is shopping and the loss of shops causes the entire city center to suffer.

The economic downturn and high inflation are currently weighing on the industry. According to HDE, retail sales only grew last year thanks to price increases, by 2.9 percent to almost 650 billion euros. Adjusted for inflation, however, they shrank by 3.4 percent. Things are expected to go a little better this year: Sales are expected to increase by 3.5 percent, which in real terms corresponds to an increase of one percent.

The forecast that shops will die not only has an impact on retail, but also on inner city development. The trade association emphasizes that the cooperation of all local actors from retail, municipalities, gastronomy and culture is essential in order to prevent entire inner cities from becoming deserted. The HDE is a member of the inner city advisory board, which is headed by the Federal Minister of Construction, and emphasizes that inner city development is a top priority. A central contact point is required for coordinating funding programs and sensible implementation of measures.

As a financial expert, I see this decline in stores as a challenge for the entire market. The closure of 5,000 stores not only means a loss of jobs, but also impacts property values ​​in these areas, as store vacancies can lead to a decline in attractiveness and therefore lower property values. This could also impact landlords and investors located in these areas. Forecasted retail sales growth could be impacted by store closures, which in turn could impact the performance of retailers and investments in the sector. The demand for immediate measures to prevent shops from dying shows the urgency of the situation and sheds light on the possible economic effects that this development can have.