How can Germany save its high streets amid corona crisis?

How can Germany save its high streets amid corona crisis?
Galeria Kaufhof in Hamburg, which had declared bankrupcy, in September. Photo: DPA
The corona crisis magnified the struggle of many retail businesses up against online business. Can Germany save its businesses - and how?

What's the impact of the Covid pandemic?

“Wir schließen” (We’re closing), “Alles muss raus” (“Everything must go” oder “Ausverkauf” (sold out) are typical signs for German stores nowadays. 

Shops in city centres have been hit hard in recent years with growing online retail business, and the corona crisis only acted as “an accelerator” said German Economics Minister Peter Altmaier from Chancellor Angela Merkel's centre-right Christian Democrats (CDU) at a digital Tuesday round table with industry experts and retail professionals.

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The German Retail Association (HDE) warns that the crisis could kill off around 50,000 shops as more people go online for the bulk of their shopping.

The fashion industry in particular is experiencing a massive rupture: from Appelrath Cüpper to Hallhuber to Sinn, from Esprit to Tom Tailor – many high street brands are struggling. 

Esprit alone plans to close around half of its stores nationwide – some 50 outlets – as part of its restructuring efforts.

READ ALSO: How the coronavirus crisis could kill off German city centres

'Make small stores more digital'

Yet Tuesday's discussion went beyond doom and gloom, and rather sought strategies to infuse life into the retail trade – and the high streets in which these stores are usually situated. 

The experts discussed how to make independent stores more digital in order to allow it to compete with larger online stores, such as Berlin-based Zalando, which have seen profits increase amid the crisis

The trade association HDE furthermore called for a €100 million funding program to support small retailers in putting more of their business online.

Large stores would have to rely more on online offerings such as digital sizing or contactless shopping, they said.

City centres should be meeting points

However, even large shopping centres outside the city often make life difficult for smaller stores. 

Altmaier said that city centres need to become more attractive for people again, independent of the commercial activity there. He called for more cultural and culinary gatherings to take place there.

“Our city centres are an important part of our social coexistence and our business location,” Altmaier said on Tuesday afternoon. “They should become favourite places for people again.” 

Ev Bangemann, retail expert at the consulting firm EY, suggested that smaller cities should focus on making their city centres “meeting places for the region,” she advised. 

Smaller stores could join forces in regional platforms. She said commercial businesses could be intermingled with smaller stores and boutiques that sell regional products that are only available there, said Bangemann.

She cited customer complaints that city centres are too monotone in appearance.

In the coming months, Altmaier plans to hold more workshops on themes such as “city centres and the digitalization of retail” and “creative new uses for empty stores.”


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