Policy

9 August 2024

“City centres are gaining increasing political attention”

What does tomorrow’s city centre look like? What political decisions would encourage residential development in retail locations? In our latest Opinion of the Month, Christian Schneider, Head of Expansion at REWE, answers these questions and more.

Reading time: 6 min.

Dear Reader,

There’s a famous saying that the three most important criteria when buying property are “location, location, location”. This is as true for retail and commercial real estate as it is for residential properties. In addition to the products on offer and the employees, it is ultimately the location of our REWE, PENNY and toom stores that determines whether footfall and sales will grow in line with our hopes and forecasts.

Location is therefore much more than a physical address. It also includes such factors as the roads and pavements that serve the store, the store infrastructure and even broadband internet for the customer Wi-Fi. Do the local conditions and legal provisions allow us to provide customers with an attractive and contemporary store?

The REWE Group’s site development team, otherwise known as the Expansion Team, deals with questions of this nature in the course of their everyday work. We aim to draw up a suitable approach for each location to create an appealing local store for customers. After all, local, everyday shopping facilities are a fundamental public service and, if developed successfully, will improve the quality of life in the neighbourhood, district or rural community.

There has been much talk in recent years of the “death” of the city centre. At the heart of this debate is the crisis facing traditional department stores, which have long been under pressure due to changing customer needs and the constant increase in online shopping. However, an attractive retail landscape is essential for vibrant urban areas, and the food retail sector is part and parcel of this.

City centres are therefore gaining increasing political attention across the board from the Federal Government, the states and the local municipalities. High-density housing and the conversion of existing buildings are often part of the debate because people want their homes, workplaces, shops and leisure to be closer together. One topic under discussion is the 15-minute city, a concept where all basic public services, including childcare, doctors, cinemas and shops, can be accessed within 15 minutes of home.

A modern REWE or PENNY store can also contribute to the revitalisation of entire city districts. However, this new political focus on city centres can only be successful if the political framework conditions are right.

Christian Schneider , Head of Expansion REWE

christian-schneider

Christian Schneider , Head of Expansion REWE

As retailers, we fundamentally welcome such projects, as the success of our stores is inextricably linked to their immediate surroundings. A modern REWE or PENNY store can also play its part in revitalising entire districts. However, this new political focus on the city centre will only be successful if the necessary political frameworks are in place.

While we offer customised solutions for every location and project, we are also committed to maximising efficiency. We do not want to reinvent the wheel each time we open a new store. Germany’s federal structure has led to a patchwork of building law with 16 different state building regulations, based to a greater or lesser extent on the Musterbauordnung (model building code), legal interpretations and the supplementary regulations of the municipal building authorities. Similar cases may therefore be assessed entirely differently from one federal state to the next, which can make application processes lengthy, and construction, expansion and site development projects more complex and expensive as a result.

For many years, food retailers have been facing growing demands. Customers want more local produce and products to eat on the go, while cooking together and seasonal barbecue ranges have also become increasingly important. As a result, today’s supermarkets are larger than they were 20 or 30 years ago. To ensure the creation of sustainable, attractive retail locations and the appropriate development of existing sites, building law restrictions on land use should take account of this growth in store size. The Federal Land Utilisation Ordinance should therefore give municipalities more flexibility when approving new food stores, particularly in terms of securing or developing appropriate local infrastructure and amenities, in accordance with the corresponding Local Plans.

As people increasingly choose to live, work, shop and spend their leisure time cheek by jowl in our city centres, new tensions will inevitably arise. Homes may be located directly above stores and the lorries supplying those stores often arrive in the early hours of the morning. Mutual consideration is a matter of course for us, but the ability to put up with everyday noise has to be a basic requirement. The provisions of the Federal Immission Control Act, particularly the Technical Instructions on Noise Abatement, therefore, need to provide more room for manoeuvre and give retailers, as potential noise emitters, greater legal clarity.

An updated noise protection law would also facilitate the increased use of electric lorries for store deliveries. These are much quieter than conventional diesel vehicles and could therefore be used in the early morning and late at night. Initial trials have been promising, but such a solution relies on an efficient charging infrastructure and the necessary investment in local power networks. With around 900 distribution network operators in Germany, applying for charging points for lorries or customer vehicles is a complex undertaking. Greater standardisation in this area would therefore be desirable.

Our store formats are constantly evolving. At the same time, society is changing and customer demands and requirements are growing. To take advantage of attractive locations, the political and legal framework must be in place. Speaking on behalf of myself and the company as a whole, we are keen to work with all the relevant stakeholders at all levels to achieve this. We look forward to a constructive dialogue.

christian-schneider

About:

Christian Schneider

Head of Expansion REWE