(L-R) Carlo Thelen, Director General of Luxembourg Chamber of Commerce; Lex Delles, Luxembourg's Minister for SMEs; Tom Baumert, President of National Observatory of SMEs GIE; Credit: MECO

A new report has offered insight into the evolution of Luxembourg's retail sector in recent years.

Luxembourg's Minister for Small and Medium-Sized Enterprises (SMEs), Lex Delles, the Director General of the Luxembourg Chamber of Commerce, Carlo Thelen, and the President of the National Observatory of SMEs economic interest group, Tom Baumert, recently presented for the first time the "Retail Report", which was announced as part of the "Pakt Pro Commerce" last year.

The General Directorate for SMEs, the Luxembourg Chamber of Commerce and the Luxembourg Trade Confederation (CLC) launched the Pakt Pro Commerce in 2016; its aim is to stimulate and support the development of local commerce through a series of practical actions.

The "Retail Report 2023" provides global information on the retail trade, its structure and its geographical distribution. It also offers new conclusions on the development of retail trade. This new report highlights three key observations on the commercial situation in Luxembourg:

1. Despite a slight drop in the number of retail businesses (-2.7%) in town centres since 2019, the commercial surface has increased by 2.9% and commercial property vacancies (non-Horeca) have decreased by more 5% during this same period. According to the initiators of this report, this demonstrates a certain resilience in Luxembourg's city centre in the face of health and energy crises, as well as a gradual consolidation of its trade.
However, the growth of the country's shopping centres continues to outpace that of the city centre, even within three years of the opening of the country's largest shopping centre, with a 3.2% increase in the number of retail businesses and a 10% increase in the sales area.

2. The report highlights significant differences between different business branches: the food (+11.8%) and drugstore (+10.9%) sectors experienced good growth thanks to demographic changes, according to the report. DIY stores (+22.3%) and those selling animal products or garden equipment (+7%) have also evolved positively during the health crisis.
On the other hand, butchers (-5.1%) and perfumeries (-6.0%) experienced a sharp decline. In the fashion sector, on which a particular focus is placed in the Retail Report 2023, the number of shops has decreased by 8.6%. However, the total sales area devoted to clothing increased slightly (+1.6%).
Regarding the hospitality sector (Horeca), the report noted a significant move away from traditional catering (+1.7%) towards fast food (+26.4%), although both branches experienced growth.
Conversely, cafes and bistros (-5.1%) as well as bars and clubs (-6.8%) were hit harder by the pandemic.

3. The report also shows a notable increase in alternative sales formats in Luxembourg, such as pop-up stores and showrooms (+33.3%), as well as second-hand fashion stores (+42.9 %). However, these still represent a minority of businesses. Moreover, e-commerce is gaining traction in Luxembourg, with a 40% increase in traditional businesses having their own online shop in 2022 compared to 2019.

Minister Delles described this new report as "a major step in the field of analysis and observation of the retail trade in Luxembourg." He elaborated: "We have created a fundamental support tool that provides concrete help to municipalities and companies in the sector. We are therefore proactively supporting the development of retail trade in order to ensure that physical points of sale remain a vital part of our town centres. In the future, we also want to expand the analysis of the commercial cadastre, for example by including information on business areas."

Tom Baumert indicated that "the commercial cadastre is much more than a simple collection of commercial data, it is a powerful means of supporting the Luxembourg economy. By offering a unique and detailed overview of the commercial situation on a national scale, it allows us to follow market trends and thus give informed recommendations. And by making data and reports available to all trade stakeholders, the resulting benefits are accessible to all."

Carlo Thelen presented the details of the "Localyze.lu" business service: Luxembourg companies which are active in the retail and Horeca sectors now have the possibility of benefiting from data from the commercial cadastre, not only through the content available on Geoportail, but also through the market analyses made available free of charge through cooperation between the Luxembourg Chamber of Commerce, the General Directorate for SMEs and the CLC.