Crisis in retail: Small shops fight for survival!

Crisis in retail: Small shops fight for survival!

The situation in German retail is becoming increasingly critical. On November 11, 2025, Alexander von Preen, President of the German Trade Association (HDE), shared his concerns about the current market situation. More and more retailers are fighting for customers and sales, with small, owner- and family-run businesses in particular suffering from the changed conditions. According to von Preen, the share of sales generated by non-store retail has fallen to just 11 percent, compared to 22 percent 15 years ago.

All retail formats, from fashion to toys to grocery stores, are feeling the impact. The president warns that diversity in retail is disappearing and that this could significantly reduce the attractiveness of city centers. He cites increased costs for rent, energy and personnel as the main causes of the crisis, as well as declining customer frequencies in city centers and the bargain mentality of consumers, who are mainly looking for discounts.

Structural challenges

A deep problem is the investment backlog, which affects both small retailers and large chains. The investment volume in the industry amounts to around 20 billion euros, but this is considered insufficient to maintain the business models. Von Preen is therefore calling for twice as much investment to ensure lively and innovative retail. Currently the general conditions are so bad that the returns for companies are not sufficient, which leads to vacancies and a desertion of the retail sector.

But how can cities, companies and consumers respond to these challenges? A study by the BDU addresses the structural change in German retail and emphasizes that small and medium-sized towns are particularly suffering from the change. It is clear that the infrastructure and quality of retail properties are crucial for positive development. Collaboration between politics, retail, restaurants, property owners and associations seems necessary to find possible solutions.

Digital change and online competition

Another important aspect is digitalization. Online trading has established itself as a clear winner in retail and is showing strong growth. It is estimated that online retail's share of sales in total retail will rise to 20 percent by 2020, while in the non-food sector it could even reach 40 percent. This means that many brick-and-mortar retailers are struggling to stay in business in the digital age.

In this challenging landscape, it is even more important that retailers innovate and find new ways to reach their customers. The variety of offerings and the shopping experience in city centers can be strengthened through creative concepts and collaborations, as various experts note in the study.

Finally, it should be noted that retail in Germany is facing major challenges. The need for investment and a rethink in dealer strategy is urgent. It is becoming apparent that without profound changes in both consumer purchasing behavior and store operations, many retail locations will not survive. The discussion and the search for solutions must begin now.

For more information about developments in retail, visit the articles at Press Augsburg, BDU and for technical innovations Wikipedia.