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TOilette paper, pasta, flour – those who have these products on sale do not have to worry about sales even in the crisis of the year 2020. According to a survey, one in ten Germans has been planning to buy these everyday products in stock again since it started the second corona wave. Supermarkets and pharmacies should emerge unscathed from the crisis to some extent.
In the rest of the retail trade, however, it seems dark. Many stores in the city center have to close. Fashion stores are particularly affected. Business in textiles, clothing, shoes and leather goods collapsed 27.7 percent in the first six months of the year. People avoided city centers and long stays at the fashion store. Instead, they ordered 20.6 percent more than last year in the Internet and mail order business.
The Corona crisis is accelerating the continuing decline of the classic German commercial area. In smaller cities, department stores are closing and people are increasingly standing in front of empty windows, regardless of the VAT reduction rate. The HDE retail association sounds the alarm and warns of tens of thousands of closures across the country and neglect in city centers.
Federal Finance Minister Peter Altmaier now sees the need for action, but initially founded a round table. On Tuesday, representatives of commerce, culture and municipalities discussed the question of how German city centers should look in the future with the CDU politician.
However, the minister made it clear in advance that there should be no simple subsidies for an industry that is already suffering and has no chance against long-term online trading. “The important thing is not to walk around the country with a shower,” he emphasized.
Thus, the request from the HDE for 100 million euros in special financing or from the German Association of Cities for a “land fund” of 500 million euros for the purchase of properties in trouble was not heard.
Source: WORLD infographic
Instead, Altmaier believes that retail should modernize and become more digital. And cities should try to have more attractive centers, offer more quality of stay and create new “spaces of experience” with culture and gastronomy.
“Our urban centers are an important part of our social coexistence and our commercial location,” said Altmaier. “They should go back to being people’s favorite places.” However, with broken benches in the market square and empty parking lots around the corner, that should be difficult. Therefore, cities have to bear some costs.
Altmaier did not rule out that there should also be financial support for distributors. But what he is most concerned about is “conceptual support.” “The corona crisis acts as a fire accelerator on the problems of urban centers,” Altmaier said, but empty stores or deserted centers are not new.
In the coming months, ideas on the themes of “city centers and the digitization of retail”, “creative reuse of empty stores” and “development of urban district concepts” will be developed in workshops.
The opposition thinks that everything is too late. “It is completely incomprehensible why Altmaier only now realizes that he has to take care of urban centers,” said green politician Katharina Dröge, spokeswoman for economic policy, and Daniela Wagner, spokesperson for urban development.
They missed “a fair sharing of risks between commercial tenants and landlords in terms of rental costs in this crisis” and “a swift reform of competition law to better deal with the power of Internet giants like Amazon.” In addition, federal funding for urban development should be expanded.
Douglas’s boss asks for more openings on Sundays
During the Altmaier workshop, Tina Müller, CEO of Douglas GmbH, also called for more flexibility in store opening hours with a view to the upcoming Sundays: “It would be easier for distributors during the Christmas business if we could open more often on Sundays, also to deal with the flow of customers to match, ”he said.
Here, however, Altmaier referred to the responsibility of the federal states. In fact, North Rhine-Westphalia has already allowed retailers to open five Sundays around Christmas.
Regardless of the ideas that different retailers try to survive with, be it with their own online store, with a reduced offer or with different opening hours: in the long run, shopping in the city will never be the same as ten years ago or 20 years.
Dirk Wichner, a retail expert at international real estate service provider JLL, predicts this. You just see an oversupply of space: “Actually, we should have to convert about five million square feet of commercial space that is no longer needed,” says Wichner. Especially on the upper floors, it is no longer worth storing a lot of clothes in expensive square meters, for example.
Instead, Wichner believes that in the future we would buy half online and half in store. Apple could be a role model, with a great online store, “but also local stores that offer a certain selection.”
There, each product is only available in some versions. “If sold, digitally optimized logistics deliver new products in a short time, which are stored in nearby areas much cheaper.”
ECE cooperates with Google
Shopping center operator ECE is also looking for new ways to attract customers to hungry centers and began a cooperation with Google on Monday. In the future, stores in the 63 ECE-managed shopping centers in Germany will be able to display their available products in the “See what’s in store” function of Google search. Look home, then go shopping is the motto.
JLL expert Wichner also believes that urban centers and common areas around commercial areas should also be more attractive: “We come from a consumer society with a monopoly-like sales structure,” he says. “And we are in the midst of a shift to an adventure society.”
In the course of the Corona crisis, many municipalities are already trying to make their urban centers more attractive to walkers and visitors. Around the afternoon, Rotterdam closes streets that were otherwise reserved for car traffic and allows restaurants and bars to expand their space onto the road. Paris closed many streets completely, in Berlin part of Friedrichstrasse became a pedestrian zone with a cycle street in the middle.
However, the Minister of Economy does not consider urban centers without cars to be a solution in themselves: “I am very cautious about this.” If urban centers are to be car-free, it must be ensured that older people with less mobility can continue shopping and merchandise can be delivered without any problem.
That is not enough for green politicians in the Bundestag either. “The quality of stay can be increased by designing city centers in such a way that they really invite you to stay and not just go shopping,” said Katharina Dräge and Daniela Wagner. “This can be achieved with open spaces without cars and with quiet traffic, green and shady, which are based on the concept of the ‘cool streets’ of the city of Vienna.”
However, when it comes to much vaunted digitization, retail is not the only player in Germany that has yet to catch up. The Federal Ministry of Economy itself also seems to be at the beginning. The joint presentation of the workshop results should take place on Tuesday afternoon on the Internet via video.
But while Minister Altmaier asked retailers to set up online stores and pointed to the “Mittelstand 4.0 competence center” in his department, the video feed remained obscure. It was only after 20 minutes that an employee took sympathy for pointing out a press office’s Twitter channel. Then follow the link there too, shortly before the presentation ended.
