Farewell to Michael's Toyland: upheaval in Weimar!

Farewell to Michael's Toyland: upheaval in Weimar!

The retail landscape in Germany is facing profound changes that particularly affect local retail. A current example is the closure of the popular toy store “Michael’s Toyland” in Weimar, Thuringia, which is scheduled to take place by the end of December this year. The owner, Michael Rott, looks back on 33 years of successful business activity, during which he was able to build up loyal regular customers, especially among families and kindergartens. The reasons for the closure are varied, but declines in sales during the corona pandemic and growing online trade are at the top of the list. According to [thueringen24.de](https://www.thueringen24.de/weimar/article300420119/thueringen-laden-schliessung-spielwaren-weimar-ladens-gezaehlt- Nimm-ladentreib-esten.html), Rott is offering a 40 percent discount on items until closing in order to reduce remaining inventory. He also plans to donate unsold goods to kindergartens.

The sad news of the closure is not unique. According to the German Retail Association (HDE), around 4,500 stores across Germany will have to close in 2023, a trend that began in 2022 with the closure of 5,000 stores. HDE President Alexander von Preen describes the situation as “dramatic”. The number of stores has fallen from 370,000 in 2015 to just 300,000. These developments are directly related to the changes that the corona pandemic has had on retail. As ZDF today reports, the vacancies in city centers have become obvious to many since the lockdowns.

The causes of the decline

A central reason for this development is the influence of the corona pandemic, which represents an existential challenge for many retailers. Retail is particularly affected, with restaurants, cultural and leisure facilities also suffering greatly. While city centers remained empty during the lockdowns, online retail experienced a huge increase in sales. The Statista article shows that online retail increased by 24 percent in April 2020, while stationary stores collapsed in sales. Consumer sentiment also remains depressed by geopolitical developments, such as the war in Ukraine. This could once again have a negative impact on the already tense situation for retailers.

In order to survive in this tense situation, von Preen is calling for adjustments to rental models, especially in the form of sales-based rents, and investment incentives for cities in order to bring more life back into the city centers. Such measures could help reduce vacancies, which remain a shadow of the once-thriving retail landscape.

A look into the future

Despite these challenges, there are also glimmers of hope. According to the HDE, the retail sector will expect possible growth in 2025, but many retailers remain skeptical, as ZDF today makes clear. The loss of jobs, like that of Michael Rott, is a painful consequence not only for the employees, but for the entire community. It remains to be seen how the industry will adapt in the next few years and what new concepts and ideas will emerge to meet the growing competition from online retail.