No time to breathe easy: Even after the foreseeable nationwide end of the 2G rule in retail, shops in pedestrian zones and shopping centers are still facing major problems. After two years of Corona, many fashion retailers lack the money for necessary investments. Vacancies reduce the attractiveness of the shopping streets, and then there is the competition on the Internet. For retail expert Gerrit Heinemann from the Niederrhein University of Applied Sciences, one thing is certain: “The crisis in the inner cities is far from over with the end of 2G. The old visitor frequencies in the inner cities will not come back.”
An overview of the challenges of an ailing industry:
High incidences
Retail has repeatedly called for the 2G rule to be abolished, which in large parts of retail only allowed access to those who had been vaccinated and those who had recovered. That now seems within reach. However, given the high incidence figures, it is by no means certain whether the step will really help the ailing dealers in the pedestrian zones. The current head of the Institute for the World Economy (IfW), Holger Görg, has already warned: “Sales could also fall because access for the unvaccinated or untested deters more potential customers who then no longer feel safe.”
Lack of attractiveness
In addition, the attractiveness of many inner cities has suffered from the pandemic. “Corona has exacerbated the problems in many places and increased the vacancy rate,” complains the general manager of the German Retail Association (HDE), Stefan Genth. Even before Corona, the attractiveness was not at its best. A large-scale survey by the Cologne Institute for Trade Research (IFH) showed shortly before the outbreak of the pandemic that many young people no longer find the pedestrian zones particularly attractive as a place to shop and go there less and less to shop.
Lack of investment funds
The pandemic has made it even more difficult to change that. Because after two years of Corona, numerous inner-city dealers bled dry financially. “Many dealers continue to put off losses from the past two years and have long since used up reserves and equity during this difficult time. This is leading to an investment and modernization backlog,” complained HDE General Manager Genth. Retailers are often no longer able to “make urgently needed investments in store equipment, digitization and the shopping experience”.
online competition
But the biggest challenge for retailers in city centers is and remains the internet. Corona has given online retail another growth spurt. In the lockdown, many people have discovered online shopping for themselves. According to the e-commerce association bevh, over 99 billion euros ended up in the tills of online retailers in 2021. And there is little to suggest that the new customers are turning their backs on the Internet. According to bevh 2021, the proportion of “satisfied” and “very satisfied” customers was 96.3 percent. Industry expert Heinemann also expects double-digit growth rates in the coming years. He predicts: “In the next few years, inner-city retail will continue to lose market share to online retail.”
manufacturer shops
It’s not just Amazon, Zalando and other classic online retailers that are competing with inner-city retailers. Manufacturers such as Adidas or Esprit are increasingly selling their goods directly to customers in their own online shop. According to bevh, such brand shops grew faster than all other online sales channels last year.
Cost of own online shops
Large retail chains such as Douglas, Media Markt, Saturn, Ikea and Hennes & Mauritz have long since set up their own online shops. However, this path seems to be blocked for many smaller retailers. In a recent survey by the Textile Shoes, Leather Goods (BTE) trade association, 61 percent of the companies surveyed stated that having their own online shop was not economically viable for them. A good half also described sales via marketplaces such as Amazon or Ebay as financially unattractive.
call for more help
In view of the difficult situation, the HDE quickly calls for further state aid for the industry. Better depreciation options and funding programs are needed – such as a digitization fund. “It must be ensured that thousands of medium-sized retailers do not lose touch and future viability through no fault of their own as a result of the pandemic,” said Genth. (dpa)