Sales area concentration: reductions even in Germany

For several decades, Germany’s sales area density grew at considerable rates year after year. Apart from some statistical anomalies (integration of Eastern Germany and its pent-up demand), this growth was remarkably continuous since 1950. The expansion of chain stores, changing consumer needs, and increasingly sophisticated product presentation were the drivers of this trend, together with the shrinking German population, which further boosted sales area concentration. The economic crisis around 2008 put a noticeable dent in this development. The expansion plans of chain stores and the willingness of the real estate industry to build new sales area both grinded to a halt. And for two years now, there has been a complete reversal of the previous trend: sales area concentration is falling. The causes are quickly identified: turnover has shifted onto the internet, and consumers are growing weary of consumption.
The sales area per resident grew from 1.394 m² in 2004 up to 1.524 m² in 2013. This value is forecast to be only 1.498 m² in 2015 – falling below 1.5 m² for the first time in many years. This might not seem like a big change in relative terms, but in absolute terms this amounts to some one million square meters of disappearing sales area.
The future will likely bring more of the same: the rising influence of online will shrink the pie for brick-and-mortar retailers, who will no longer want to or be able to afford the increasing cost of physical sales area. It appears that in the coming decade, we will have to get used to shrinking sales area even in Germany – as in many other European countries before.