Store Disappearance and Inner-City Visitor Frequencies
(A2025-124570)

AUTHORS

Erik Maier, HHL Leipzig Graduate School of Management

ABSTRACT

An increasing number of stores are disappearing from inner cities. Cities and retail managers are afraid that each store closure will accelerate the decline of brick-and-mortar in a retail area, quickening the “death of the high street”. This research studies whether the closure of stores of a major retail chain (department stores with large sales areas) affects inner-city visitor frequencies (as a precondition for visits and sales) in the retail area where the store was located. Using a difference-in-difference design (cities with closure vs. those without), we find that store disappearance has a negative, but non-lasting effect on visitor frequencies: on average, visitor frequencies decline by about 18% past the closure (on average −12% in the first year), but rebound almost to pre-closure levels after roughly one. This effect is moderated by the demographic characteristics of the city, with cities with a poorer or older population suffering a more lasting decline in visitor numbers.