When the city is no longer the centre: Purchasing power goes on the move

If you follow the current discourse about new urban development concepts, you will soon encounter the idea of a so-called "15-minute city".

This refers to the ambition to be able to fulfil all daily needs by bike or on foot within just a quarter of an hour. This includes retail, most notably food and pharmacies, as well as a basic infrastructure including healthcare, educational facilities, restaurants, cultural offerings and recreational areas.

If we take a rational approach, such visions could possibly be developed for cities in Germany with millions of inhabitants and the existing urban districts in Berlin, Hamburg, Munich and Cologne could be reorganised in terms of infrastructure.

But how can the ideals of a 15-minute city be justified or even realised in the other small, medium-sized and large cities, which have significantly fewer inhabitants?

The historical development of city centres is no coincidence, but since the Middle Ages has followed the principle that certain forms of trade and services require a certain minimum demand that tended not to exist in such a concentrated form outside the city walls.

A marketplace only made sense in places where a sufficiently high density of people with corresponding needs could be expected. The same idea of centrality was followed in the construction of town halls and churches.

This principle still applies today, although retail has now lost its dominance and the space that has become available is now shifting towards food service, further education and culture, as well as life sciences and the optimisation of enjoyment. The idea of a central market is also undermined every time a multi-storey shopping mall or even a simple retail centre is opened "outside the city walls".

For many years, there has been enough purchasing power for such parallelism. This now seems to have come to an end, at least since COVID-19 and the trend towards working from home and the Ukraine crisis, which was followed immediately by energy price rises and an abrupt increase in housing shortages.

The opposing concepts of centrally orientated urban development on the one hand and the urban ideal of being able to reach almost all day-to-day destinations within 15 minutes on the other can be well illustrated with a visual comparison of "target vs. honeycomb structure (of a beehive)".

If we look beyond our own horizons to the international megacities, they may indeed resemble a honeycomb structure. However, the historical settlement stages were always initially characterised by sporadic urban development analogous to the target model. It was only through steady growth and the inevitable urban congestion that followed that many solitary cities later became a honeycomb-like metropolitan region with several million inhabitants.

In Germany, the Ruhr area is the best example of such a development. However, it is precisely here that it becomes apparent that the reasonable approach of a "15-minute city" seems to be impractical and has so far barely been considered, at least by the politicians in this densely populated area with more than 5 million inhabitants: neither the "Centro" shopping centre covering around 125,000 m2 in Oberhausen, nor Bochum's "Ruhrpark" which has 115,000 m2 of retail space, seem to want to limit themselves to customers travelling only 15 minutes, when they are also advertising their low-cost 7,550 and 14,000 parking spaces respectively.

It therefore follows that the decentralised urbanisation that the 15-minute city model actually aims to achieve could fail completely, especially in view of the current economic conditions.

If the purchasing power of the population is falling drastically everywhere due to inflation and, moreover, it is no longer possible to find staff for retailers that are still open, then the increasingly limited skills available in the retail sector must be centralised as much as possible.

As the fixed costs for shopfitting and salaries are to a large extent independent of the number of inhabitants in a location, it is almost imperative from a commercial point of view not to expand with a focus on a 15-minute distance, but to rely on a certain minimum centrality and the associated purchasing power. 

The more the general appetite for consumption declines, the more intensive local efforts should be to strengthen or save their own centrality. With this in mind, the current migration-related changes in consumer behaviour should also be considered.

At the moment, the trend is that in future only those who either have access to a sizeable inheritance or who can count on sufficient housing subsidies from the state, which can be justified in terms of human rights, will be able to live in the city centre. 

If you look at the agenda of the most recent city marketing events, you will notice that the topics discussed there often have very little to do with the problems that retailers and landlords have to deal with on a daily basis. It appears that all of the incendiary letters that politicians from the left to the far right are now sending to the state government or even the Federal Chancellor have absolutely nothing to do with the quality of life in city centre squares and pedestrian zones before and after dark.

It seems likely that many retail experts from politics and administration simply do not want to see the often mentioned "white elephant standing in the room".

Is it possible that the rowdy, so-called "party people" in the city centre are partly responsible for the fact that, as in Stuttgart, centrality is clearly declining and therefore there is a lack of important purchasing power in the surrounding area?

There is sometimes also a great deal of frustration when it comes to the issue of official support during negotiations with tenants and landlords. In recent years, the extremely narrow interpretations of fire protection, evacuation plans and monument protection have repeatedly led to permanent empty properties.

Of course, this is in no way intended to question legitimate security principles. However, the sometimes unrealistic interpretation of the relevant standards and guidelines should at least be challenged and corrected quickly by an appropriate arbitration board.

The official administrative processing times that have now become acceptable often create the feeling that the problems of inner-city development have not yet been fully recognised in some places. But whenever the reference is made to unfilled openings and the associated unacceptable waiting times, the retailer or 

landlord making the application is faced with the bittersweet realisation that they have already experienced similar frustration when looking for staff or tradespeople.

Maintaining and increasing purchasing power will also be of interest in future decisions on location policy. 

What impact, for example, do major industrial relocations such as Infineon have on the Dresden region or semiconductor manufacturer Wolfspeed on Saarland? The relocation of chip manufacturer Intel to Magdeburg is expected to create 3,000 jobs at Intel and hundreds of other jobs from suppliers on the proposed high-tech campus over the next four years.

The available purchasing power for Magdeburg's retail sector could therefore increase considerably if Saxony-Anhalt's state capital is able to position itself as an attractive residential location. Or could the pedestrian zones in the cities around Magdeburg also expect sales growth with innovative home office models?

With flexible working time models that do not require them to be present every day, future families of employees could even choose to live in Stendal or Dessau, which are around 60 kilometres away, or, if they are impressed by the quality of life there, choose Braunschweig or even Potsdam as their new home, even though it is more than 15 minutes away from their new workplace (90 or 120 kilometres).

Overcrowded schools facing a shortage of teachers, sports halls that are no longer fit for purpose and even taking that first walk through the pedestrian zone should be considered important decision criteria.  

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