During the Covid-19 crisis, streets emptied and neighbourhoods felt eerily quiet. It was a stark reminder that when local retail disappears, our cities can feel like ghost towns.

Local retail, mainly comprised of small and family businesses, not only provides essential goods and services. It fosters economic stability by creating local employment opportunities and anchoring wealth within communities. It is the foundation of social cohesion, promoting and preserving the unique identity and diversity of citizens.

In light of this, city strategies aimed at supporting, strengthening, and revitalising local retail are needed to sustain urban life and to contribute to the well-being and vibrancy of communities.

Ghent’s unique approach to local retail

The city of Ghent offers valuable insights into the dynamics of retail due to its unique blend of tradition and modernity. With a rich history as a trading hub, dating back to the medieval period, the Flemish city has evolved into a bustling urban centre with a vibrant retail scene.

Its innovative approach to urban planning, including the creation of car-free zones and collaborative initiatives between local stakeholders and municipal authorities, makes it a compelling case study for understanding the challenges and opportunities facing retailers in contemporary urban environments.

Several key strengths underpin Ghent’s retail ecosystem, according to Bart Inghelbrecht, coordinator of Retail and Hospitality for the City of Ghent, such as its picturesque historical centre, robust retail policies, and a high proportion of locally-owned businesses, which contribute to a lower vacancy rate than the national average in Belgium. Additionally, the city’s growing population, including a significant student demographic, provides a fertile ground for testing new consumer trends.

A key moment in Ghent’s urban development was the implementation of a forward-thinking mobility plan in 1997, further enhanced in 2017, which transformed significant portions of the city centre into car-free zones. This shift prioritised the use of public spaces and bolstered retail and hospitality activities.

Pure Ghent

Ghent’s retail community is characterised by a collaborative ethos. PuurGent is the municipal body in charge of developing a quality commercial fabric that includes local shops and authentic catering establishments.

It is divided into distinct councils – the Retail Council, Nightlife Council, and Culinary Council – each tasked with specific roles in promoting and enhancing their respective sectors.

For example, the Business Improvement District transforms public spaces into vibrant retail hubs; the Culinary Council focuses on promoting Ghent’s gastronomic scene through events like Gent Smaakt, while the Nightlife Council aims to foster cohesion among nightlife stakeholders and city officials to create a safer and more inclusive nightlife environment.

“PuurGent plays a crucial role in supporting local retailers, shaping retail policies, managing commercial areas, and positioning Ghent as a premier retail and hospitality destination,” says Geert Maes, Vice-President of PuurGent.

One noteworthy aspect is PuurGent’s financial model, where funds for supporting local retailers are sourced directly from the municipal budget, ensuring a consistent flow of resources.

Traditional Porto

Porto, renowned as a thriving hub for tech talent and tourism, also faces a number of challenges inherent to its local retail sector. These include a slow transition to digitalisation, talent retention and a worrying vacancy rate leading to shop closures.

“To counter these challenges, in 2017 we decided to launch the ‘Porto de Tradicao’ programme,” explains Patrícia Romeiro, Director of Economic Activities Department in Porto.

The programme is aimed at safeguarding establishments of cultural and social importance through tax incentives and promotional activities. Taking advantage of national legislation, the municipality regulates the leasing of properties, ensuring the sustainability of local businesses.

“It is important that the national regulation allow municipalities to have more autonomy,” acknowledges Romeiro. “”Fortunately, that’s the way it is with Porto.”

Addressing overtourism in Bruges

Bruges faces the twin challenges of over tourism and a monoculture retail landscape, necessitating a shift towards quality tourism initiatives. “We are starting to think about some restriction, but are restrictions really a solution?” wonders Lut Laleman, Director Works and Economics, and Ilse Snick, Centre Manager in Bruges. Rather than resorting to restrictions, the city is focusing on positive incentives to elevate the quality of tourism experiences.

The introduction of a centre manager and a comprehensive action plan comprising 30 initiatives has resulted in a robust retail community, enhanced business services, and strategic marketing campaigns.

Valladolid adapts to demographic changes

Valladolid grapples with demographic shifts, and struggles to retain local talent. The city’s governance model emphasises annual cooperation days with social partners and district-based retailers associations. These gatherings facilitate dialogue and strategic planning to address weaknesses like low levels of digitalisation and the threat of population loss.

“We advocate for proactive measures,“ explains Víctor Martín, Councillor for Retail and Markets in Valladolid. These include seasonal campaigns aligned with city events, such as Black Friday and fashion weeks, to bolster local commerce. “We also want to promote craftsmanship through collaborations with local artisans and events.”

Talent retention is a priority for the city, evidenced by partnerships with educational institutions, integrating retail marketing training into curricula.

Empowering local retail through social innovation in Bari

In Bari, changing consumer trends and the proliferation of e-commerce are threatening the vitality of street retailers.

“A shop is not just a shop,” explains Roberto Covolo, Director for Local Economy and Entrepreneurship in Bari, “it goes beyond selling products to pedestrians. Shops are a vital part of the local community; city retailers build the social, economic fabric of our cities.”

Between 2012 and 2022, Bari’s commercial activities decreased. To tackle this issue, the city launched the ‘d_Bari’ programme, aimed at bringing new meanings and supporting local retailers through grants. “We tried to change the approach, and not only give formal help to local entrepreneurs, but to work with them directly on the ground.”

Examples of initiatives supported by the programme include upskilling and community-building efforts, such as the establishment of the Bari School of Commerce and the creation of the bartender academy.

By investing in social innovation and community partnerships, Bari aims to transform the perception of local shops and their role within the city. The programme’s success is evidenced by increased retailer engagement and the establishment of the Urban District of Commerce.

Fostering local retail resilience

“The role of local retailers extends beyond mere economic transactions; they embody the identity and lifestyle of European cities,“ says Josep Xurigué Camprubí, Deputy Director Barcelona Comerç, a foundation that brings together 23 commercial entities in the city.

Barcelona Comerç has advanced the creation of a European Capital of Small Retail, that in 2023 was welcomed by both the European Parliament and Commission. The award will contribute to a collective awareness on the importance of local retail on a socio-economic level – via the creation jobs and the anchoring of economic activities at the local level.

European municipalities recognise the indispensable role of both social and economic stakeholders, alongside institutional support, in fostering thriving local retail ecosystems. A strategic action plan has been devised to address contemporary challenges facing small businesses, encompassing demographic shifts, skill development, evolving consumer behaviours, and inclusive socio-economic policies.

Central to this vision is the need for a balanced perspective of city dynamics, with bespoke solutions tailored to the unique challenges faced by individual municipalities.

EU’s support for local retail

The European Capital of Small Retail is also feeding the wider scope of the Retail Transition Pathway, a co-creation process developed by the Commission in July 2023 that encourages a more resilient, digital and green retail ecosystem.

Employing over 29 million people in the EU, retail is one of the European industrial ecosystems with the greatest economic integration potential.

“The retail ecosystem is the biggest of the 14 ecosystems in terms of products and value added,” shares Géraldine Fages, Senior Expert in the Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs of the European Commission. “And SMEs play a key role within the retail ecosystem from an economic viewpoint. They are are crucial for urban and rural local communities.”

However, European SMEs are usually facing challenges in fostering robust and sustainable digital and green innovation due to the lack of external finance and often fragmented business regulation.

To tackle this, the Commission has recently published a transition pathway for a more resilient, digital and green retail ecosystem, co-created by the Commission with national, regional and local authorities, business stakeholders, social partners and NGOs, the plan identifies challenges and opportunities for the retail ecosystem and proposes actions to support its digital, green and skills transformation and improve its resilience.

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All these stories were presented at Eurocities’ Study Visit on Local Retail, which took place in Ghent on 7-8 March 2024.