Combat vacancies, create leisure facilities, generate investment

06.03.2025

by Jennifer Meyer

A new study shows: People are returning to city centers – but what they find there is often not enough. What makes German cities attractive and which challenges remain.

The city center was once the heart of urban life. A place where people shopped, strolled around and met up. But what has remained of this ideal? Store closures, vacancies, discussions about traffic and quality of life characterize the cityscape in many places.

At the same time, a recent study by the market research institute IFH KÖLN shows that footfall in city centers has almost recovered to pre-COVID-pandemic levels. Around 69,000 interviews with passers-by in 107 German cities make it clear that the need for urban meeting spaces has not disappeared. But the question remains: How can city centers be designed in such a way that they are attractive for all generations – and not just serve as a backdrop for retailers struggling to survive?

Shopping remains central – but only in combination

Blurred photo of a busy shopping street with pedestrians; copyright: Adobe Express

Retail, gastronomy, cultural offerings, meeting places - city centres benefit from mixed-use concepts.
© Adobe Express

Retail remains the main reason for visiting the city (61%). However, competition is strong: 40 percent of respondents cite gastronomy as the primary reason. This change is particularly noticeable in Generation Z – among 15 to 30-year-olds, shopping (56%) and gastronomy (44%) are ranked more closely as reasons for visiting.

There is an interesting interplay between cultural and leisure activities: Those who come to the city for cultural experiences are also very likely to spend money on shopping (47%) or gastronomy (53%). This means that vibrant city centers are not created by retail alone, but by a clever combination of shopping, culture, gastronomy and quality of stay.

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The major challenges: Vacancies and infrastructure

But the reality of many cities remains different. Deserted stores, weak leisure facilities, unattractive cityscapes – these are the biggest points of criticism from visitors. Both gastronomy and retail receive a solid rating – with average scores of 2.2 and 2.3. Leisure facilities, on the other hand, are in short supply in many cities – 40 percent of cities score worse than 3.0 here.

Empty stores in particular are a visible sign of the transformation. The insolvencies of large retail chains have left their mark in many places, with entire streets affected by closures. IFH KÖLN concludes that vacancy management is the key to keeping city centers alive. “Those who tackle the biggest pain points of city centre visitors first – vacancies and store deaths – will be the first to succeed,” says Boris Hedde, Managing Director of IFH KÖLN. But how is this supposed to work?

City of the future: who pays for the change?

It is not enough to simply make city centers “nicer”. New principles, new structures, new players – and new exchange formats – are needed. In fact, a strategic approach is lacking in many places: how should the conversion of city centers be financed? How can consumption-free spaces be created without undermining the economic foundations of cities? What political framework conditions are needed for this?

“Mixed-use centers that combine a high quality of stay with attractive retail, restaurants, inner-city living, culture, education and leisure activities remain a key success factor. All inner city stakeholders must continue to work together on this.“

Bernd Düsterdiek, Councillor, German Association of Towns and Municipalities (Deutscher Städte- und Gemeindebund)

One thing is certain: retail alone will not stop the decline of city centers. Anne-Kathrin Tögel from the German Chamber of Industry and Commerce (Deutsche Industrie- und Handelskammer) advocates the development of new concepts: “We've had good experiences with the establishment of educational facilities, medical care and public institutions.” At the same time, new transport strategies are needed to ensure the accessibility of city centers.

Stefan Genth from the German Retail Association (Handelsverband Deutschland) also does not see the retail sector as the sole savior: “It's about close cooperation between all local players – retail, gastronomy, trade, municipalities and culture must all pull together.”

New concepts, new ideas – but also new responsibilities

What can such a change look like? This is precisely the question addressed by IFH KÖLN's new “City Talks” event format, which aims to discuss best practices and develop strategies for the future – in a dialog-oriented and co-creative manner, with representatives from different German cities.

The aim is to turn city centers into multifunctional meeting spaces that integrate not only retail space, but also social, cultural and gastronomic offerings. Municipalities should learn from each other, exchange solutions and develop new perspectives.

The city center as a mirror of society

Street musician playing piano in a busy park with fountain and audience; Copyright: Unsplash/Josh Appel

A look at the age structure of visitors to the city center shows: The city center belongs to everyone. Millennials (aged 26-50) make up 30 percent of visitors, followed by Generation X (26 percent). A quarter are baby boomers, while Generation Z is represented by 21 percent. The average age of people in the cities is 46.1 years – again lower than in previous surveys.

What does this mean for urban planning? Cities that only focus on one target group – such as older people with traditional shopping needs or young experience-oriented people – are losing relevance. What is needed instead is an urban ecosystem that intelligently combines living, working, culture, retail and leisure. “Vibrant city centers are dynamic places of encounter and diversity,” says Jürgen Block from the Federal Association of City Marketing (Bundesvereinigung City- und Stadtmarketing). “They must constantly evolve to meet the needs of all generations.”

If you want the city of tomorrow, you have to act today

The IFH KÖLN survey shows: People are willing to come to the city – but they expect more than just shopping streets. Those who invest now in quality of stay, experiences and a functioning infrastructure have the opportunity to help shape the city of the future. Eliminating vacancies, creating consumer-free spaces and developing alternative usage concepts – these are the key challenges of the coming years.

Source: Press release of IFH KÖLN (German)