Whether it is increasing competition from online retailers and large foreign companies (e.g. Amazon, Shein, Temu), businesses closing due to a lack of successors, declining footfall in city centres or insolvencies – the number of companies in the retail sector has been declining for years. The so-called ‘death of shops’ is thus increasingly becoming a vicious circle: as vacancy rates rise, the attractiveness of city centres declines, which in turn leads to further increases in vacancy rates, thus further driving the death of shops.

The coronavirus pandemic has accelerated this development. As shown in the chart on the right, there were still around 320,000 companies active in the retail sector in 2019. In 2020, this figure fell to around 300,000 – a decline of more than 6%. Although the number of companies grew again by 2.5% in 2021, it has been declining again since then. Many brick-and-mortar retailers shifted their business to online retail at that time, causing the number of companies in that sector to rise in the short term. During this period, online retailers were able to stabilise their sales, but internet business has also become increasingly steady, shifting business from brick-and-mortar to online retail in the long term.

During and after the pandemic, the insolvencies of large retail companies in particular, such as Peek und Cloppenburg, Garry Weber, Reno, Görtz, and Galeria Kaufland, attracted attention. However, a look at the development of company figures broken down by company size (left graph) shows that the number of large companies with more than 250 employees and more than £50 million in turnover has risen steadily since 2018. Medium-sized companies with up to 249 employees and up to €50 million in turnover have also increased since 2018, with the exception of 2021. Many micro-enterprises (up to 9 employees and less than €2 million in turnover) and small enterprises (up to 49 employees and less than €10 million in turnover), on the other hand, have left the market. 
 

It is noteworthy that the corporate structure is still dominated by these micro and small enterprises, which account for 98% of the total. However, in addition to the shift to online retail, there is also a shift towards greater market share for large companies. Whether this development will lead to more attractive city centres and break the vicious circle remains to be seen. What is certain, however, is that structural change in the retail sector is having a significant impact on small businesses, which, unlike large companies, are mostly quietly exiting the market. 
 

Other figures can be found here.