27 February 2025

Fashion Retail in Austria: A Sector Under Pressure and Possible Solutions
Tariffs, e-commerce, and shifting consumer habits are reshaping Austria's fashion retail industry. What's next for city centers and small-town stores?

Retail in Transition: The Big Picture

Austria's fashion retail sector is facing turbulent times, influenced by local economic shifts and global trade policies. The recent call for higher tariffs on Far East retailers highlights the complex interplay between international trade and the fashion industry. From discussions on tariff adjustments to the rise of online shopping, it's clear that politics has its hands in the retail game—right down to the price tag on a T-shirt.

At the center of Austria's retail analysis is the Handelsverband, an independent, non-partisan trade association representing Austrian retailers and advocating for fair competition and better regulatory conditions. Collaborating with them is Standort + Markt, a consulting firm specializing in market analysis and urban development research. Their annual "City Retail Health Check" provides critical insights into the country's retail landscape.

Rising Vacancy Rates in Small Towns

The latest study shows a troubling trend: Austria's small towns are struggling with an increasing number of empty storefronts, with vacancy rates now at 15.6%. Despite a slight overall increase in total retail space—largely due to the opening of Vienna's Vio Plaza—many city centers are shrinking. In fact, without this new shopping mall, Austria's retail space would have actually declined.

Particularly hard-hit are towns like Steyr, Wiener Neustadt, and Leoben, while cities such as Mödling and Wels maintain lower vacancy rates. The primary driver of this decline? The ongoing shift toward e-commerce, which continues to draw consumers away from brick-and-mortar stores.

Fashion Retail Facing an Uphill Battle

The fashion industry has taken a particularly severe hit, losing about 20% of its retail space over the last decade. As online shopping dominates, physical fashion stores are disappearing, making way for grocery stores, leisure businesses, and service providers.

E-commerce giants, especially low-cost platforms from the Far East, are reshaping shopping habits. Many Austrian retailers argue that they operate under stricter regulations and higher costs compared to online sellers from non-EU countries, creating an uneven playing field. Handelsverband calls for stricter monitoring of parcel imports and fair competition measures, echoing broader global trade debates.

Strategies for Reviving Austria's Retail Sector

Industry experts and trade representatives have proposed several measures to counteract these trends:

- Lower labor-related costs to ease financial pressure on retailers.
- Abolish lease contract fees to make renting physical stores more viable.
- Strengthen import regulations to ensure fair competition with e-commerce platforms.
- Reduce bureaucracy to simplify business operations for local retailers.

Another key approach is embracing multifunctional city planning. Rather than focusing solely on retail, urban spaces must incorporate a mix of shops, services, leisure areas, and living spaces to create vibrant, attractive city centers.

Looking Ahead: The Future of Fashion Retail in Austria

Retail remains the top reason for visiting city centers, but its dominance is weakening. According to the IFH Köln, 61% of visitors cite shopping as their primary reason for being in town, followed by dining (40%) and sightseeing (20%). To keep city centers thriving, decision-makers must address not only economic issues but also practical concerns like public restrooms, parking availability, and green spaces.

With the right policies and urban planning strategies, Austria's fashion retail sector can still adapt and survive. But one thing is certain—standing still is no longer an option.


Image: A symbolic picture created by Fashion.at using Microsoft Copilot, Bing, on February 27, 2025. The AI-generated scene captures a lively street in Vienna, Austria, where couples, families, and individuals stroll along a narrow, bustling passageway. Ornate buildings with intricate facades line the street, their high-end storefronts gleaming under the daylight. Behind expansive glass windows, mannequins stand motionless, showcasing the latest fashion trends. Sunlight bathes the foreground, casting elongated shadows that accentuate the architectural richness of the surroundings. In the background, multi-story buildings rise, adding depth and a sense of urban vibrancy to the scene.