:quality(80))
These figures clearly illustrate just how important the retail sector is to Germany’s economy. Traditionally, November and December are the weeks with the highest sales of the entire year for the retail sector. So far, however, 2024 has been a difficult year for the industry. Initially, there were high hopes that consumer spending would pick up and, along with retail sales, boost the German economy. Consumer sentiment, however, remains subdued. Private consumption will once again fail to serve as a driver of overall economic growth in the final months of the year. This is a setback for the retail sector. The situation is particularly challenging for many companies because they urgently need to invest in store locations, digitalization, and sustainability, but now lack the necessary financial resources to do so.
Enabling Investments
Thus, the current—and essentially temporary—slump is turning into an existential threat. To avert this dangerous downward spiral, the federal government must support businesses: Depreciation options for investments in digitalization, climate protection, and downtown areas should be expanded. This would allow companies to make the investments that are essential for their own future. The HDE therefore calls on the federal government to develop direct depreciation options for these necessary investments that are low on red tape, efficient, and take effect quickly. We must work together to find a way out of this difficult situation. Otherwise, there is a risk of negative consequences not only for retail companies but also for entire downtown areas.
Strengthening City Centers
The retail sector is indispensable for attractive city centers. People head into city centers primarily to shop. City centers are meeting places for all generations. The younger generation also gathers in city centers. Shopping has long been part of event culture and leisure activities, especially among younger people. This presents city centers—and us as retailers—with enormous opportunities to shape the future. For despite all the reports of the decline of city centers, people appreciate attractive city centers and enjoy shopping there. This makes it all the more important now to set the political course for the future of city centers. We must take action across the board—all of us together, with all sectors of the economy, and at all political levels. The retail sector needs an attractive environment. Safety, cleanliness, and good accessibility—these are an indispensable trio. In many cities and municipalities, there is still room for improvement in these areas. However, they also need the necessary financial resources to achieve this. The federal program “Sustainable City Centers and Hubs,” with its opportunities for concrete projects in our city centers, must be made permanent. In addition, climate change and rising temperatures present new challenges: we need more shade and ways to cool down. With more water features and fountains, as well as more green spaces and trees, our cities can be made resilient and sustainable.
Startup Sector: Retail
To counteract vacancies in city centers and to bring the opportunities of digitalization to the retail sector, a startup initiative is needed. In the current year alone, another 5,000 stores will close permanently. Therefore, a startup campaign is urgently needed to inspire entrepreneurs to enter the retail sector. The potential is there: In the first half of 2024, the retail sector recorded around 58,000 new business startups. The retail sector thus remains a successful startup industry dominated by small and medium-sized enterprises. The many new ideas and concepts provide valuable impetus for the future viability of the entire industry. Therefore, potential entrepreneurs should not be held back but rather supported in their endeavors. For this reason, the HDE is advocating for an initiative that promotes and supports new business startups. Founders should receive a grant for up to 60 months, for example, to cover the setup of their store, the point-of-sale system, and marketing efforts. Training in business management or marketing should also be funded. These support programs would encourage more people to open their own businesses in downtown areas. Such a startup initiative would thus turn vacant spaces into opportunities for new ventures.
The economic and sociopolitical situation remains challenging. The retail sector, in particular, has repeatedly demonstrated how adaptable and capable of change it is. This allows me to look ahead with great confidence. This turnaround can succeed if policymakers get on board and ensure the right framework conditions are in place. We must all work together to make this happen.
