9,000 SMEs to close shop in Germany this year, HDE retailers warn

 

BERLIN – Thousands more brick-and-mortar shops, operators of Small and Medium Scale businesses, SMEs are set to close for good in Germany on account of higher operating costs and declining consumer purchasing power, the country’s HDE retailers association said, warning of a business death spiral in city centres.

The number of retailers in Europe’s biggest economy has been on the decline for years. The coronavirus pandemic accelerated the trend as shoppers went online to make purchases: 11,000 physical businesses permanently shut their doors every year between 2020 and 2022.

But even in the years of 2015 to 2019, an average of 5,000 shops closed each year.

Another 9,000 are projected to close in 2023, the association predicted in Berlin on Monday. Apart from micro-enterprises, this leaves 311,000 shops nationwide, according to the HDE. By comparison, in 2015 there were still almost 373,000.

“In view of the figures of the last few years, every alarm bell should be ringing in all city centres and among politicians. Because without successful retail trade, city centres have few prospects for the future,” warned HDE President Alexander von Preen.

He said that it is above all smaller specialist retailers outside the grocery trade – like fashion boutiques, shoe shops and bakeries – that are affected by the carnage.
At the same time, many large chains are also thinning out their network of stores.

The increasing vacancies in many town and city centres made them less attractive and endangered the health of remaining businesses, he warned.

To slow the death of shops, von Preen said “unbureaucratic and fast approval processes for conversions and rezonings must be at the top of the priority list” for governments.
“If the retail sector dies, the city dies.”