Can the centre hold? Germany looks to its Covid-stricken high streets
The stakes for Germany’s high streets could not be greater when the economics minister, Peter Altmaier, summons trade representatives across the country this month for a series of crisis workshops to discuss how to save them from collapse.
In Germany, as elsewhere across Europe and beyond, the coronavirus pandemic has blown a huge hole in street retail – accelerating the decline in footfall precipitated by the rise of online shopping.
But Altmaier’s plan – to “digitise” local shops’ relationships with their customers to allow them to better compete with online retailers – speaks to a quirk of the German high street. Cash is still king in many places, credit cards are often not accepted in smaller shops and many retailers do not have websites.
In other respects – such as internal decor, window dressing and quaint or sometimes garish advertising – the high street sometimes has a 1950s throwback atmosphere.
Altmaier wants to help retailers adapt to the new reality. “If I want a shirt, I should be able to buy it just as easily on my high street as on the internet,” he said recently.
The crisis is urgent: according to the German Retail Federation (HDE), 50,000 retail locations, €40bn (£36bn) of turnover and hundreds of thousands of jobs could be “swept away” in the coming months. Dehoga, the federation for the hospitality industry, predicts that 70,000 of its members’ establishments may close, leading to far fewer cafes and restaurants in town and city centres.
Concerts, wine festivals and markets have been cancelled, contributing further to the sense of decline. Burkhard Jung, the president of the Association of German Cities, says coronavirus has advanced their “disintegration” by several years.
Regardless of what solutions arise from his summit, Altmaier has made clear that the German state should play an active role. The federal government, he said in an interview with the German media in early August, must be ready to “support the necessary measures even more intensively with local authorities and the states”.
The HDE has called for the establishment of a €500m inner-city fund to help reimagine how urban centres might be used.
Altmaier’s ministry said it was interested in creative solutions, including finding new uses for empty shops, digitalising existing ones and bringing craftspeople, specialist shops and small-scale manufacturers back to the high street. “We need concepts for the rejuvenation of urban centres to prevent them dying out,” a spokeswoman said.
Many more businesses had gone online during the pandemic – a trend likely to continue even once it was over, she added. Digital advances such as click and collect and online grocery shopping remain a rarity in Germany, even while they have revolutionised shoppers’ habits elsewhere, but could also contribute to a revival of the German high street.
But urban development specialists, who have been warning for decades about the decline of the high street, say the measures will be too little, too late.
Thomas Krüger, a professor of urban development at Hamburg’s HafenCity University, said retailers would be unable to digitise fast enough, and predicted that whole streets would be full of boarded-up shops within months. “The situation is likely to become particularly dramatic in the autumn, when we can expect a bloody wave of bankruptcies,” he said.
Many problems faced by city-centre retailers, such as “astronomical” rents, were suddenly coming into focus, he said. “There is urgent need for a dialogue to take place between shop owners and landlords.”
As well as high rents, shopkeepers face a reputational problem. Far from willing the high street on, many Germans think shop staff lack customer service skills. In a survey published last year of 59,000 shoppers in 116 German cities, most respondents said the city centres were not worthy of more than a C+ grade.
Complaints included monotony and uniformity – centres looking too similar – a lack of customer service and prices that were not competitive with internet retailers. Some also said crime and vandalism, as the direct result of empty premises, added to a lack of attractiveness.
Despite the gloom, Krüger, like others in his field, sees an opportunity for urban centres to be reinvented as diverse places of living, leisure and shopping.
Large chains had gravitated to inner-city prime spots because they were able to pay the high rent, leading to “many inner cities looking exactly the same”, he said. Now he hopes a natural adjustment might take place.
If footfall remained low the rents would have to adjust accordingly and that could give inner cities the chance to reinvent themselves, Krüger said. Smaller, more independent businesses and boutiques could move in, or municipalities could buy back buildings and manage them themselves.
There is a secondary threat to the city posed by coronavirus: a rapid decline in office use as home-working takes its place.
“If the offices are used less and less, that means there are ever fewer people in the centres who are shopping, having lunch, drinking coffee,” Krüger said. That could also have a knock-on effect on rents, leading to considerable losses for property investors, he added.
In the search for solutions, many mayors, urban planners and city managers are focusing on variety to try to encourage a better mix of living, working, shopping and leisure.
Boris Hedde, the head of Cologne’s Institute for Retail Research, predicted that as fashion stores became less dominant, other businesses could take their place.
“Skilled crafts and trades, services, furniture and DIY stores and small supermarkets – all could return to centres,” he said.
Jung the Association of German Cities president is also the mayor of Leipzig, a university city whose centre is seen as providing the ideal mix of living, culture, learning, shopping and hospitality. He sees it as his political duty to “actively encourage both affordable living and working, to in turn prevent businesses from collapse”.
Experiments across the country include digital department stores, popup shops, free wireless internet, offering exhibition space to manufacturers, inviting galleries, libraries and co-workers to inhabit empty shop spaces, as well as offering craftspeople and other tradespeople, such as shoemakers, glaziers and key cutters, affordable rents.
Stefan Genthe from the HDE likens the challenge to the restructuring of bomb-damaged German cities in 1945. “We’re looking at the biggest chance to restructure Germany’s inner cities since the second world war,” he said.