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Competition and complementarity of retailing in the historic city centre of Vienna

Le commerce de détail dans le centre historique de vienne : concurrence et complémentarité
Gerhard Hatz

Résumés

Cet article a pour but d'étudier les effets de la concurrence et de la complémentarité sur le commerce de détail dans le centre historique de Vienne ainsi que d'analyser les changements induits par ces mécanismes. Ceci concerne non seulement le statut du centre de Vienne en tant que quartier de premier ordre pour les commerces, mais aussi la façon dont cette position s'est profondément modifiée, ainsi que les structures et l'organisation spatiale du commerce de détail dans ce quartier commerçant majeur. L'étude repose sur une enquête réalisée auprès d'un échantillon d'environ 2000 magasins.
Trois indicateurs ont servi de base à l'analyse des effets de la concurrence et de la complémentarité sur les locaux commerciaux: les secteurs concernés, les chaînes, et la taille des magasins. Au niveau spatial, l'analyse est basée sur les unités fonctionnelles qui forment le centre historique de la ville de Vienne.
Dans ce quartier, une concurrence acharnée entre détaillants provoque une diminution du nombre de ceux-ci, mais pas une baisse du nombre de locaux commerciaux. Les chaînes, tant nationales qu'internationales, sont le moteur de la restructuration du commerce de détail et des modèles spatiaux qui y sont liés. Certains détaillants sont contraints de rechercher des niches ou des segments de marché libres, définis par le principe de complémentarité des secteurs, des formes, ou des localisations des chaînes nationales ou internationales. L'étude conclut que les effets de la concurrence et de la complémentarité ne peuvent s'expliquer dans leur intégralité, mais qu'ils doivent s'interpréter par rapport à leur impact sur l'organisation de l'espace urbain. La concurrence entre grandes chaînes multinationales est la source d'une dynamique qui ne cesse de transformer l'ensemble du commerce de détail au centre de Vienne. Ce processus est perçu comme crucial pour la vitalité du commerce du centre-ville, car de nouvelles structures commerciales apparaissent dans les quartiers environnants, amenant des possibilités et des niches inédites. Les dynamiques déclenchées par les chaînes multinationales sont liées à l'émergence de zones supplémentaires hautement spécialisées et adjacentes aux principales rues commerçantes. Les dimensions plus importantes que l'on peut trouver dans la principale zone de shopping tirent profit – et vice versa – des zones spécialisées supplémentaires, qui contribuent au maintien du haut standing de la principale zone commerçante, mais également au maintien de la ville en tant que lieu commercial de premier ordre, même si la restructuration observée du commerce de détail transforme le centre historique en destination à thème pour le shopping de loisir.

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Introduction

Theoretical background

1The historic city centre is the largest and most diversified shopping location of Vienna. With almost 226,000m2 retail space it is still at the top of the retail hierarchy of the city. Like in other downtown areas current developments in retailing have had a considerable impact on the historic city centre as a retail location at the top of the retail hierarchy of the city. In the past decades competition in retailing has been dominated by the competition between retail sectors and store sizes, between chain operated and individually operated businesses, and retail locations. Suburban shopping malls and their advance into inner city areas mean serious competition for the traditional businesses. Store sizes have increased and small shops have been replaced by larger units. By the internationalization of the retail industry and the establishment of its outlets, mainly traditional individual retailers have been put out of business. For retailing in the historic city centre, these changes have been considered as crucial. Not only the unique shopping atmosphere of the old city and its exclusivity of supply but also the position of the historic city centre at the top of the retail hierarchy in Vienna as well as its function as a trans-regional shopping destination seems to be at risk.

2Despite the considerations concerning the hierarchical organised retail systems in cities in general and city centres at the top of this hierarchy (see for example Heinritz et al. 2003, pp. 208), studies carried out within the last decade have revealed a common picture: ‘...contrary to the expectations of many geographers, a clear intraurban central hierarchical structure remained surprisingly robust.’ (Lowe and Wrigley, p. 641), and unlike retailing in US downtown areas, the historic city centres in European cities remain at the top of the retail hierarchy (see for example BRAUN, 2002). These findings are supported by concepts based on central place theory, evolutionary economics and the new retail geography.

3Borchert (1998) examines the growing concentration of retailing in the main centres of cities exerting the concept of nested hierarchical centres based on the principles of Berry’s classification of shopping centres and business configurations. By an upward hierarchical movement – a movement to the next hierarchical level, i.e. to a more central location – the retail sectors gain access to a larger market. As a consequence this upward hierarchical movement leads to a growing concentration of retailing in the main centres of cities. Subsequently, the main centres are expanding and improving their share in total sales area. This process is accompanied by a restructuring of the retail sectors of these main centres. As rents are rising, branches with a lower rent paying capacity are moving to cheaper locations at the edge of the city.

4The rank and the position in a hierarchically organised retail system, i.e. the ‘centrality’ of shopping streets and centres, are defined by retail space, sales figures and catchment areas, but also by the range of goods. The leading sector is represented by goods of middle-term consumption, with the clothing sector holding the top position. The higher the rank of a shopping district, the greater is the dominance of the clothing sector. The goods of short-term consumption indicate the opposite: the lower ranking a shopping street or district, the higher the proportion of shops offering products of short-term consumption. The dominant position of particular sectors is reflected by the number of businesses as well as by the respective retail space (see for example Heinritz et al., 2003, pp. 211, Kulke, 2004, pp. 138 or Weltevreden, 2005, p. 830).

5In evolutionary economics firms compete more in terms of the development of new products. ‘In the context of the ‘competitiveness’ or ‘vitality’... historic city centres are not competitive in terms of prices... City centres remain attractive as a retail location only if they are able to generate new sectors offering new products. What is more, the variety of shops traditionally located in the old city centres is a feature that creates additional demand’ (Weltevreden et al., 2005, p. 825). Besides, the influx of chain operated stores selling moderately-priced goods is regarded as ‘trading down’ of the city centre’s attractiveness and image as a unique shopping destination offering unique products (Heinritz et al., 2003, pp. 211).

6New retail geography centres on ‘styling and placing’ of the firm but also on the ‘privileged urban milieu of consumption’, focusing on the ‘reciprocal nature of the relations between space and corporate retail activity’ (Clarke, 1996, p. 292, cit. in Lowe and Wrigley, 2000, p. 642), ‘Styling and placing’ of a firm – ‘its flair for retail design, positioning, service, and promotion’ – are primarily responsible for its establishment ‘as a highly successful retailer within a largely ‘privileged urban milieu of consumption’’ (Lowe and Wrigley, 2000, p. 642). New retail geography reflecting on geographies of display examines the cultural logic of retailing by determining the emergence of shopping streets as differentiated spaces of consumption and the role of streets as new urban landscapes of consumption. ‘’Streets of Style’... become invested with specific identities... emphasizing in particular the unique ‘brand’ of a... street location... identity-based location preferences have led to certain ‘pioneering’ clothing retailers locating in centres... and within these centres the identity and image of particular streets seem to have specific culture and image attached to them.’ (Lowe and Wrigley, 2000, p. 645) To participate in this image the ‘return’ to the city centre is becoming an important issue for multinational corporations as a competitive advantage.

7The structure of retailing in city centres is not to be examined in terms of a shopping destination serving only local residents and customers. In terms of changing shopping attitudes of a post modern society as well as the growing competition between cities, the consumption of the city centre with its unique atmosphere becomes part of consumption itself. ‘Equally... the image of a vibrant place with an array of designer bars, restaurants, and nightlife is a way to position that city in global markets...’. In the concept of a symbolic economy, ‘the city is removed from its material conditions, an image designed to foster the consumption of the city itself.’ (Miles and Miles, 2004, pp. 52).

8Given the considerations based on the hierarchical concepts and dynamics of retail, evolutionary economics and the new retail geography three major research questions can be derived for analyzing the restructuring of retail in the city centre of Vienna:

9The intensified competition for the best locations and central places at the highest rank fosters a restructuring in retailing in the city centre. Best funded retail premises gain advantage in this competition. Considering retail economics these are chain operated stores of multinationally operating retail enterprises. In terms of the central place theory restructuring of retailing in the city centre results in an increasing concentration of chain operated stores in the clothing sector accompanied by an increase in average store size per unit. Premises with lower rent paying capacities like traditional retailers are displaced to periphery locations (see for example Heinritz, 2003, pp. 211).

RQ1: Identifying the restructuring of retail as it is predicted in the upward movement theory: Do these dynamics lead to an increasing specialisation and a decrease of the vitality of the city centre due to selection and concentration of retail businesses, retail sectors and retail forms with competitive advantage? Are these dynamics accompanied by an increasing number of outlets of international chain stores and the clothing sector, forcing out traditional retailers, small shopping units and low ranking retail sectors?

10Subsequently the dynamics of retailing in city centres, as it is argued by an upward hierarchical movement, are considered to have a negative impact on the vitality. In terms of evolutionary economy vitality, defined as number of shops and the variety of shops, is the competitive advantage of the city centres. By losing its vitality the competitive advantage of the city centre is decreasing.

RQ2: Analyzing the effects on the vitality in terms of enterprises, retail sectors and retail forms. Does the recent restructuring of retailing provide opportunities for generating new sectors offering new products as it is essential for maintaining vitality as a comparative advantage for the historic city centre?

11As evolutionary economy focuses on the ambience of the shopping location at a higher spatial level as a means of competition in retailing, new retail geographies focus on the restructuring of retailing in terms of consuming this ambience, i.e. the city centre. Restructuring in retailing is modified by the ‘branding’ of the shopping district as well as by the consumption of the image provided by the shopping district. For retailing in the city centre subsequently restructuring of retailing is determined by the transformation of the city into a leisure destination, in which the consumption of cultural goods and experiences become prominent: Downtown areas are transformed into a themed shopping space, equipped with artists’ quarters, art galleries, bars and restaurants. Mixed used shopping centres for a refined demand are implemented in converted historic ensembles.

RQ3: Analyzing the restructuring of retailing in the historic city centre in terms of new retail geography. Does the restructuring of retailing convert the historic city centre of Vienna into a leisure destination by an increase and specialisation in retailing, offering ‘leisure products’ like clothing, bars and restaurants, arts and crafts? Is the ‘branding’ of the historic city centre attracting outlets of multinational corporations and how do they compete with traditional retailers and other premises designated to leisure shopping?

12‘Most studies have studied retail dynamics at a higher spatial scale of analysis.’ (Weltevreden et al., 2005, p. 825). What has been neglected is the question of how restructuring of retailing affects the spatial patterns in historic city centres. This study is not only interested in gaining systematic empirical evidence to understand the structural dynamics underlying the economic evolution of retailing within the city centre of Vienna, but also in the spatial effects of retail restructuring.

13Davies (1976) explains spatial organisation of retail in downtowns by zonal and clustered patterns. The most influential factors of this spatial organisation are rents and the ranking of retail sectors. Based on the central-place theory the position within the ranking is defined by the range of goods and the frequency of consumption. According to Davies’s model, there is a central-peripheral organisation of businesses according to the range of provided goods. Highest ranking central functions, as the clothing sector, concentrate in the centre, at the most expensive and exclusive locations close to or in the Main Shopping Area. In these zones clusters with a high degree of specialisation are embedded. In Davies’s model the retail sector and the respective ranking of goods are the decisive structural features of retail in downtowns. This spatial organisation is, however, modified by the urban fabric, such as ‘ribbons’ reflecting the important arterial roads of the inner city. What is not included in Davies’s model, though, are elements related to various forms of competition influencing retail in downtown areas, such as different store sizes or the modification of spatial patterns by chain operated stores (Heinritz et al., 2003, pp. 206).

14Studies on retailing in downtown areas indicate not only a move towards a destination for leisure shopping but also a related specialisation of specific retail sectors and retail forms. In order to analyse the related spatial patterns two spatial dimensions have to be taken into account. At the level of the historic city centre the analysis of retail sectors and retail forms provides the basis for analyzing the spatial differentiation and specialisation at the level of functional areas. If it is assumed that specialisation is designated to specific areas and districts within the city, it cannot be identified at the level of the city centre as it becomes blurred at a higher spatial level. Revealing the restructuring and specialisation of spatial patterns of retailing is the goal of a fourth research question:

RQ 4: Not only enterprise-related criteria are regarded as instruments of competition but also the location. Enterprises compete for the best location, but also the location itself is a determining factor of the competition in retailing. The qualities of locations vary according to requirements of individual businesses, but also selecting a specific location directly affects the quality of this location. In the analysis it is assumed, that the interdependence and interaction of instruments of competition will bring about new principles of spatial organization, which respectively lead to new spatial patterns. Consequently, identifying these mechanisms and their resulting spatial patterns is one of the essential goals of this analysis.

The Viennese retail context and the system of retailing in Vienna

15The prevailing pattern of retailing within the city today has its origins in the 19th century. (Lichtenberger, 1978, p. 30) It is characterized by a hierarchical structure within the system of shopping-streets. Lichtenberger‘s (1995) classification determined ‘sub-centres’, ‘regional centres’ and ‘neighborhood-centres’. This hierarchical structure has clearly changed within the last decades. With the emergence of new retail forms, shopping-malls at the outskirts of the city and within the city boundaries, new retail organizations and retail sectors, spatial concentration and polarization within the hierarchy of shopping centres and shopping streets have been observed. New urban centres and inner-city shopping malls are restructuring the traditional hierarchical system of Vienna’s shopping streets. Within the greater Vienna region 24 shopping malls with a total sales area of more than 418,000 square meters have been established, including Austria’s largest shopping mall ‘Shopping City Süd’, with an estimated annual sales volume of one billion Euros, in the southern outskirts of Vienna.

16The restructuring of the retail hierarchy was accompanied with a restructuring of retail sectors in the city proper. The number of stores supplying items for long-term demand such as home furnishings, which were formerly of particular relevance, has noticeably declined in all of Vienna’s shopping districts by moving to the outskirts of the city, where sufficient and inexpensive property is available.

The reshaping of Vienna’s retail system by symbolic economies

17The city’s traditional retail system has substantially been affected by the restructuring of retailing in terms of symbolic economies. Expanding shopping streets at the higher ranks and the loss of importance for others are clearly indicating an increasing polarization occurring among Vienna’s retail hierarchy as it is described by the upward hierarchical movement. While new outlets of multinational corporations have been established in high-ranking shopping streets or existing stores have been upgraded to these levels, at the lower ranks premises have been closed down or replaced by stores selling goods of short term consumption or ethnic businesses. The processes of upgrading or downgrading of inner-city shopping streets in the hierarchy are accompanied and sometimes even - more or less deliberately - stimulated by public planning actions as the expansion of the rapid transit system (i.e. subways). The restyling and remodelling of the street surfaces by establishing pedestrian zones, slow traffic zones, and newly-designed streetscapes, is aimed at improving the attractiveness of these selected shopping streets as well as at labelling the streets with a unique identity and image.

18However, the same outlets of the same multinational corporations can be found in every shopping mall and shopping street, which results in the vanishing uniqueness of the shopping streets, supported by the customers’ strong demand for trendy fads and cheap ready-made clothing. The variety of goods and stores in Vienna’s shopping streets has become more homogenous, and their rank in the hierarchy seems to be more strongly represented by the labels (and the companies they represent). The establishment of different fast-food chains in the main shopping streets indicates the re-orientation towards ‘entertainment shopping’ from a mere supplying function. Numerous Mc Donald’s restaurants or Starbucks Coffee shops are not only the visible signs, but also enhance the higher ranking shopping destinations.

19New shopping malls fit into the urban hierarchy of shopping streets by offering a range of goods which is quite similar to the inner-city shopping streets. By converting the Gasometer and the Ringstrassengalerien into shopping malls historic architecture has been adjusted to what modern-day consumers expect from an attractive and trendy shopping environment. Recycling of historic buildings for retail uses is the Viennese equivalent of city planners’ and property developers’ response to the standardization in the retail system (O’Brien and Harris, 1991, p. 111), even though such a recycling has become a ‘standardized product’ in the restructuring of retailing in city centres worldwide (see Zukin, 1995, p. 22, cit. in Miles and Miles, 2004, p. 56). Additionally, these newly-integrated shopping malls differ from shopping streets with a mixture of multinational corporations and traditional and highly specialised stores. In the late 20th century the idea of the department store was revived by the concept of flagship-stores. Flagship stores are the main or top outlets in a chain. Since 2000 they have emerged in the city’s retail landscape, but they are exclusively located at the highest ranking shopping destinations, the historic city centre and the Mariahilfer Strasse (see Fassmann, Hansal and Hatz, 2002; Fassmann and Hatz, 2004).

Vienna’s historical centre shopping area

20Downtown Vienna reflects the city’s entire history. The overall ensemble of buildings has been recognized as a World Heritage Site by UNESCO. This recognition underscores the particular historical and architectural importance of the inner city. The city centre is the centre of political and economic power in Austria, and it is the country’s cultural heart. The high standards evident in the building structure and downtown’s accessibility have been the reasons that the historic centre of Vienna has never fallen into decline or become functionally out of date. Vienna’s downtown - unlike downtowns in many US and some European cities – remains the social and functional centre of the city. Due to the excellent public transportation system, the downtown area is in easy reach for tourists as well as for the Viennese themselves. Historic buildings such as St. Stephen’s Cathedral (Stephansdom) or the Imperial Palace (Hofburg) are established parts of tourist itineraries. The more than adequate accessibility and the historical character, add to its centrality and its attractiveness as a shopping location (see Fassmann and Hatz, 2002).

21The spatial organisation of retailing in the historic city centre became manifest in the late 19th century. According to the principle of hierarchical organisation, the spatial organisation of retailing in downtown Vienna is characterised by a hierarchically organised system of streets. The most important ones are the main shopping streets such as Kärntnerstraße, Am Graben and Kohlmarkt followed by subordinate shopping streets, formerly serving as exit roads to the north and east (Rotenturmstrasse, Wollzeile) This hierarchical system is modified by a central-peripheral gradient and the urban fabric of the historic city centre.

22The central-peripheral organisation basically depends on the gradient of land and property value and the distance to the main shopping streets, resulting in a central-peripheral classification of the dominating retail functions, which are specified by retail sectors, store scales, and the establishment of outlets. Spatial patterns of retail functions depend on the urban fabric of the city centre, set by the historical buildings on the one hand and the major non-retail functions on the other hand. A characteristic example is the government district located in the southwest of downtown Vienna, where not only the splendid architecture of the buildings but rather their transformation into offices of public administration limits the availability of retail space. Additionally, a CBD in the northwest of the city, where offices of financial and insurance industries as well as real estate agents, are frequently located in historic buildings, restricts the expansion of retail functions. According to Lichten­berger (1998, p. 113) and Heineberg (2001, p. 165), like other European city centres, the historic city centre of Vienna is organised asymmetrically by an attractive ‘front’ and a rather run-down ‘back’. The impressive ‘front’ is located in the middle section of the Ringstrasse with its magnificent buildings, residences and historical landmarks. The less ostentatious ‘back’ borders the Danube Canal.

Data, indicators and area of research

  • 1 In this context Ms D. Schönbichler is to be thanked for the translation into English as well as for (...)

23In the analysis the instruments of competition in retailing have been derived by three indicators: the retail sectors, the retail form, categorized as chain operated stores and individually operated units. As to the size of businesses, retail space has been selected as its characteristic feature. The study itself is based on a field survey conducted in 2004. The survey included service and retail businesses as well as bars and restaurants in the Main Shopping Area and its supplementary zones of the historic city centre of Vienna. In the survey features like ownership, name and type of the business as well as its location in the street network have been covered. The categorisation of the retail sectors followed a catalogue of about 100 different types. Subsequently, the sectors were assigned to 10 dominant, functionally homogenous categories. The survey itself was carried out as a cooperation of Standort & Markt, a private market research company, and the Department of Geography, and the data were collected directly on the spot.1

24The study comprises 107 shopping streets in the historic city centre of Vienna that mainly have a retail function. The borders of the historic city centre have not been selected in accordance with administrative criteria, but according to physiognomic and functional criteria. Ringstrasse has been selected as the eastern, southern and western border. The magnificent boulevard was built in the mid-19th century, replacing the former city fortifications and still separating the historic city centre from the neighbouring districts physiognomically and functionally. To the north the Danube canal is a natural as well as a functional border between the historic city centre and the neighbouring inner districts.

Results

Structure of retailing in downtown Vienna

25While shopping streets and centres in Vienna are basically dominated by the clothing sector and bars and restaurants, in the historic city centre three main sectors can be identified. Clothes, jewellery, shoes or perfume account for nearly a third of the complete retail businesses and space. As ’Recreational shopping’ involves comparing products with a certain emotional and personal value which can be seen as part of the consumers’ leisure activities, we have created a category called ’Fashion & Style’, which includes clothing, accessories, watches, jewellery and beauty products (see also Weltevreden et al., p. 831).

26Other retail sectors are considerably less common. The shift of the historic city center toward a leisure destination is revealed by the share of sales area, taken over by bars and restaurants. They account for almost 20% of all the enterprises and floor space. However, the proportions of these sectors hardly differ from hierarchically lower ranking shopping streets and shopping centres in Vienna. What is of an exceptional significance is a third sector categorized as ‘Arts & Craft’. It includes antiques shops, galleries and art dealerships. All in all, more than 60% of all businesses included in the study can be attributed to one of these three dominant sectors.

27Effects of concentration and increasing store sizes caused by chain operated stores are revealed by the fact that they account for almost 20% of shops and 37% of all the retail space. With regard to retail sectors significant differences can be observed. In correspondence to the city- and nationwide trend, outlets are most common in the sectors ‘Banks & travel agencies’ and ‘Food & Groceries’. The impact of multinational corporations on the retail structure in the historic city centre seems to have the most sustainable effect on the category ‘Fashion & Style’. A third of all fashion stores are outlets of national and international chains, but already half of the entire retail space in the fashion sector belongs to outlet stores, which refers to the competition between large-scale, outlet-centreed retail chains on the one hand and the small individually operated local shops on the other hand. But transformation of retailing by multinational corporations does not affect all business segments in the same way. It neither appears influential for bars and restaurants nor in the category ‘Furniture & Interior Design’ where the establishment of outlets with regard to the number of stores and retail space is below the average of the entire historic city centre. As far as ‘Furniture & Design’ is concerned, the separation of functions between suburban malls and inner city retail becomes visible, which is not true of the bars and restaurants, though.

Table 1. Retail and service industries in downtown Vienna 2004 by businesses, floor space and share of chain-operated stores.

Table 1. Retail and service industries in downtown Vienna 2004 by businesses, floor space and share of chain-operated stores.

28The first step of analysis reveals, that at the level of the city centre neither retail sectors, nor the establishment of outlets nor retail space can fully explain its position at the top of the retail hierarchy. In order to understand the spatial structures of retail locations and entire shopping areas their basic structural principles have to be considered. In his model of land use in downtown areas Davies (1976) has shown that the position of city centres at the top of the retail hierarchy is mutually dependent on the development of supplementary shopping areas, whose structure can be explained by their competition and by their complementarity to a Main Shopping Area (Heinritz et al., 2003, pp. 206). Subsequently it appears to be crucial to conduct the analyses at the level of spatial subdivisions.

Subdivisions of retailing in downtown Vienna

29The historic city centre is not to be regarded as a prime shopping location, constituted of isolated functional units, but as one central shopping area. It is not just the processes going on in this part of the city which are responsible for its unique shopping atmosphere and its function as a trans-urban shopping destination, but also specialised supplementary zones which have established themselves in the adjacent areas. Since the unique appeal of the historic city centre is due to both, the highly specialised districts and the main shopping area, it seems necessary to analyse how these units influence each other, either in a positive or negative way.

30Within the historic city centre competition and complementarity in retail have led to a clearly visible spatial and functional differentiation. This spatial and functional differentiation is structured by the interaction of the three dominant components in this competition: Retail sectors, internationally and nationally operated chain stores and store sizes. Eight spatial units which differ according to the dominant components can be distinguished.

Table 2. Shopping districts in downtown Vienna 2004 by businesses, floor space and chain-operated stores.

Table 2. Shopping districts in downtown Vienna 2004 by businesses, floor space and chain-operated stores.

Main shopping area

31The Main Shopping Area of the historic city centre is constituted by the major shopping streets of the city, Kärntnerstrasse, Graben, and Kohlmarkt. This area comprises a total of about 400 retail premises with about 67,500 m2 of retail space. A third of all businesses and about half of the entire retail space are concentrating in the Main Shopping Area, which means the highest intensity of functions in the historic city centre. In this area retailing is transformed by multinational corporations and recreational shopping into a globalized retail destination in terms of a ‘multiplicity of standardised’ shopping varieties (Zukin, 1998, p. 837).

32The assortment of retail sectors emphasises the high rank and the high degree of specialisation of the Main Shopping Area. ‘Fashion & Style’ is the dominant category, comprising slightly more than 40% of all businesses and retail space. Although the main tourist paths lead through the main shopping district, the number of bars and restaurants is below average. Few but large outlets of multinational corporations are dominating the Main Shopping Area. While the proportion of outlets belonging to ‘Fashion & Style’ in the main shopping area is only 10% above the Viennese average, two thirds of the retail space of ‘Fashion & Style’ account for outlet stores.

33Competition and complementarity of large-scale outlets operated by international chain operated stores also leads to a further specialisation within corporations and the sector ‘Fashion & Style’ at the level of the main shopping streets. The number of stores providing ‘Fashion & Style’ corresponds to slightly more than 50% in Kärntnerstrasse and Graben and goes up to 70% on Kohlmarkt. Whereas on Kohlmarkt and Graben, ‘Jewellery’ accounts for nearly 30% of ‘Fashion & Style’ stores, it goes down to 16% on Kärntnerstrasse.

Figure 1. Shopping districts and main shopping locations in downtown Vienna.

Figure 1. Shopping districts and main shopping locations in downtown Vienna.

34Differentiation and complementarity of the main shopping streets are further reflected by a concentration of large-scale multinational chains selling moderately-priced goods around the area Kärntnerstrasse/ Graben and the concentration of shops specialising in upper-end products of the category ‘Fashion & Style’ around the area Graben/Kohlmarkt. Along Graben/Kohlmarkt stores mainly provide luxury items, which is reflected by the numerous flagship-stores of the more exclusive designer labels, like those of Cartier, Armani, Gucchi, Louis Vuitton, Hermes or Versace. In the area of Kärntnerstrasse/Graben Zara, Mango, Tie Rack, d’Orsay, Pinkies, Street One, Sisley, have opened outlets. H&M is represented with three outlets. Considering the share of floor spaces in the sector ‘Fashion & Style’, occupied by chain stores, the huge impact of large-scale outlet stores on Kärntner­straße/Graben becomes even more visible. In ‘Kärnterstrasse’ almost 80% of retail space in the sector ‘Fashion & Style’ accounts for chain operated stores, on Graben it is 70% and goes down to 60% on Kohlmarkt. The latter, though outlets of international chains as well, are smaller.

35Taking into account that the historic city centre is traditionally supposed to be a city-wide or even a trans-urban shopping destination, the position of Kärntner­strasse has certainly weakened and faced a process of ‘trading down’: The same outlets can be found in all subsidiary centres and shopping malls throughout the entire city, whereas the area Kohlmark/Graben has been upgraded to a location of exclusive flagship stores which cannot be found anywhere else in Vienna.

36Due to the economic pressures resulting from this fierce competition of multinational corporations, many of the traditional locally owned businesses have not survived. Subsequently the uniqueness of retailing in the main shopping area has been reduced. An outlet of H&M has been established at the location of a former traditional Austrian fashion store Braun & Co. Similarly, the exclusive Austrian fashion label Adelmüller or the renowned interior designer for the Vienna State Opera Backhausen, have disappeared from Kärntnerstrasse. Retailing in the Main Shopping Area has become removed from its traditional and unique conditions. In 1993 the Main Shopping Area was expanded by the opening of the Ringstrassengalerien at the world-famous Ringstrasse, the establishment of the Ringstrassengalerien, a covered shopping mall incorporated in a glamorous, totally rebuilt residence from the second half of the 19th century can be regarded as evidence of expanding the main shopping area, but also as the move of the main shopping area to one of the endlessly repeated multiplicity of standardised attractions shaping the fabric of retailing in globalized city centres.

37In the surrounding areas of the Main Shopping Area functional differentiation of retail can be observed in various expansion zones. The retail structure of these specialised areas is primarily defined by the complementarity to the main shopping area. In adjacent side streets there are rather individual small shops and boutiques instead of international chain stores, in a greater distance to the Main Shopping District, a small number of specialized traditional shops, often offering items to meet a very refined market have remained.

Northern extension zone of the main shopping area

38North of the main shopping area an extension zone of the Main Shopping Area has established itself. The ‘Fashion & Style’ sector with more than 50% of the stores even exceeds this sector in the Main Shopping Area. But considering the retail space the ‘Fashion & Style’ sector only accounts for about a third. Smaller boutiques have moved into this supplementary zone and seem to benefit from being adjacent to the Main Shopping Area. This phenomenon of a so-called ‘back alley’ of the Main Shopping Area can be observed in other European or US-American cities as well, and can be interpreted as an indicator of an ‘off the mainstream’ strategy of companies and customers alike, who consciously want to dissociate themselves from the mainstream. Upscale products and services are provided at expensive locations, but off the mainstream and also somehow segregated. So the marketing strategy does not involve popular locations attracting a great number of customers. On the contrary, businesses and locations are only known to ‘insiders’, information is passed on selectively and informally, for instance, orally, on the grapevine. This is why only an elitist circle is familiar with details. In this area highly specialised shops offer avant-garde products to meet a refined market. This assumption is supported by the fact that compared to the main shopping area, the share of international fashion chains decreases. Just about a quarter of the shops are outlets, accounting for about 40% of retail space. Generally, larger stores are outnumbered by small-scale premises. That is also true of retailers providing ‘other consumer goods’, which account for 16% of businesses, but only for 12.3% of retail space. In contrast to the Main Shopping Area, larger-scale service firms as well as furniture and interior design stores are more concentrated in this area.

Figure 2. Distribution of ‘Fashion & Style’ by enterprises, floor space and chain operated stores.

Figure 2. Distribution of ‘Fashion & Style’ by enterprises, floor space and chain operated stores.

Antiques Quarter

39‘Every well-designed downtown has a mixed-used shopping centre and a nearby artists’ quarter’. This transformation of retailing in downtown areas in terms of symbolic economies as it is stated by Zukin (1995, p. 22, cit. in Miles and Miles, 2004, p. 56) is true for downtown Vienna as well. With regard to the category ‘Arts & Craft’, including antiques shops, art dealerships and galleries, the historic city centre has an outstanding position in the retail structure compared to that in other shopping centres or shopping streets in Vienna. Concentration and density of ‘Arts & Craft’ is extremely high in the immediate surroundings of the main shopping area itself. The emergence of the ‘Antiques Quarter’ can be traced back to the 19th century. The nucleus was the Dorotheum, the leading auction house in the city. In the Antiques Quarter the category ‘Arts & Craft’ encompasses about 25% of the shops in this vicinity. Specialization is even more obvious with regard to retail space, 40% of which have gone to this category. In this way the Antiques Quarter supplements the neighbouring main shopping area, which, in return, has been prevented from expanding into the Antiques Quarter by the latter’s prominent historical position. Only at the fringes some kind of competition and a mix of ‘Arts & Craft’ and smaller fashion boutiques can be found. Therefore, the enlargement of the sector ‘Fashion & Style’ forming an extension zone of the main shopping district has not taken place south of it, but in the north.

Figure 3. Distribution of ‘Arts & Craft’ by enterprises, floor space and chain operated stores.

Figure 3. Distribution of ‘Arts & Craft’ by enterprises, floor space and chain operated stores.

Leisure district

40To the north and east of the Main Shopping Area a Leisure District, dominated by bars and restaurants has evolved. More than a quarter of the businesses and floor space is part of bars and restaurants. In the ‘transitional’ zone to the Main Shopping Area it goes up to a third. The spatial pattern of the leisure district is based on ‘ribbons’ and adjacent, more extensive ‘clusters’. The ‘ribbons’ follow the axes corresponding to Wollzeile and Rotenturmstrasse, which are extension roads of the Main Shopping Area leading through the leisure district. The category ‘Fashion & Style’ accounts for 40% of the stores in those two streets. Concerning retail space, it becomes obvious that smaller boutiques outnumber larger stores. On Wollzeile the concentration of the category ‘Cultural Interests’ is remarkable, mainly represented by bookstores, accounting for 40% of the retail space. This phenomenon is part of a historical development which is still prevailing.

41With increasing distance to the Main Shopping Area, a growing number of specialty food shops and grocery retail stores reveal the streets downgrading into a local supply centre. Competition and complementarity of retail and service industries on Rotenturmstrasse, however, are determined by the competition between the sectors ‘Fashion & Style’ and bars and restaurants. About 80% of floor space in Rotenturmstrasse account for these two sectors.

42The cluster element in the leisure district is characterised by bars and restaurants, spreading over the neighbouring areas of Rotenturmstrasse. In this adjacent clusters, every third business and almost 40% of retail space account for restaurants, bars and cafes. The expansion of the Leisure District is enhanced by its location between two major interfaces of public transport, St. Stephen’s Square and Schwedenplatz, Even though located in the rather less attractive ‘back’ of the city, this district is quite close to the Main Shopping Area and there are hardly any competing functions that might prevent the lively restaurant and bar scene from expanding. The opening of the first generation of businesses set off a fairly dynamic process of expansion which was further accelerated by the decline of the former garment district. The closing down of retail premises and wholesalers of textiles provided opportunities for bars and restaurants to move into the vacant space.

Figure 4. Distribution of ‘bars and restaurants’ by enterprises, floor space and chain operated stores.

Figure 4. Distribution of ‘bars and restaurants’ by enterprises, floor space and chain operated stores.

43The development of this Leisure District in recent years clearly indicates the structural changes downtown Vienna has been undergoing : it is not just an important destination for shopping, but it is also has been transformed into a fashionable location for leisure and entertainment. The trendy combination of shopping and entertainment is visible throughout the historic city centre and on a larger scale corresponds to what is provided in a typical shopping mall at a small scale, where outlets of fashion chains are dominating, supplemented by an entertainment sector mainly consisting of leisure facilities and a variety of restaurants and cafés, embedded in the ensemble of ‘food courts’. In addition to that, the historic city centre does not only have the highest concentration of workplaces, but it is also a major tourist destination providing numerous attractions and hotels and therefore the demand for facilities like restaurant, bars and cafes is still increasing. Restructuring of retailing and leisure services in terms of ‘Consuming the city’ has converted and shaped the historic city centre of Vienna. The restructuring of downtown Vienna in terms of a leisure shopping destination has not come to an end yet. The transformation of – mostly traditional - retail premises into fancy bars and restaurants is spreading into the surrounding neighbourhoods of the main shopping area.

Eastern supplementary zone

44The Eastern Supplementary Zone of the main business quarter shows structural resemblances with the Leisure District. However, main streets which could take over shopping street functions are absent in this area. As opposed to the Main Shopping Area, the share of the ‘Fashion and Style’ sector amounts to about 25 % in this supplementary zone and small boutiques outnumber larger scale businesses. Like in the Leisure District bars and restaurants are dominating the eastern supplement area. Every third of the premises and nearly 40 % of the floor spaces are related to this sector. Together with the Leisure District another supplementary zone has developed in the north and east of the Main Shopping Area which is dominated primarily by bars and restaurants, fostered by its location between the hotels along the Viennese ring road and the Main Shopping Area.

Figure 5. Distribution of ‘Banks and Travel Agencies’ by enterprises, floor space and chain operated stores.

Figure 5. Distribution of ‘Banks and Travel Agencies’ by enterprises, floor space and chain operated stores.

Southern supplementary zone of the main shopping area

45According to its functions the supplementary zone south of the main shopping district is noticeably different from those in the Northern Extension Zone. The southern supplementary zone basically encompasses the area around the Ringstrasse. This neighbourhood is characterised by hotels and restaurants, banks and travel agencies, which account for more than half (52 %) of the entire floor space and 42 % of the businesses. Accordingly only 12 % of enterprises and 8 % of retail space account for stores of the ‘Fashion & Style’ sector. The concentration of the bars and restaurants as well as banks and travel agencies can be explained partly by functions that have evolved throughout history, and partly by the historical architecture. When the Ringstrasse was built, floor spaces were designated for street side cafes or restaurants, which reflected the original concept of the Ringstrasse as a boulevard. To some extent the concept of street side cafes has remained in the form of the traditional coffeehouses along the Ringstrasse. But not all of them have survived. Car dealerships moved into some of the vacant spaces, succeeded by banks and offices of the travel industry, mainly regional offices of airlines. In addition, one of the most recent developments in the central business district of Vienna is to be found around the Ringstrassen area where numerous hotels have established themselves and incorporate the image of the central location and the imposing facades of the historic buildings. This development provides further evidence of complementarity to the tourist business and to the adjacent main shopping area.

Figure 6. Distribution of ‘Food & Grocery’ by enterprises, floor space and chain operated stores.

Figure 6. Distribution of ‘Food & Grocery’ by enterprises, floor space and chain operated stores.

Western supplementary zone

46The structure of the Western Supple­mentary Area is characterised by competing functions on the one hand and its vicinity to the main shopping area and the specific function as CBD on the other hand. Clothing retailers only account for 13 % of shops, which are generally of a smaller scale and only account for 9.3 % of floor space. Bars and restaurants are less widespread than in the Leisure District, but more than in the Main Shopping Area.

47What is typical of supplementary areas is a decreasing proportion of the ‘Fashion & Style’ sector, whereas the category ‘other consumer goods’ is getting more important. It is not the high percentage of service firms, but their considerably large share of retail space which characterises the Western Supplementary Zone. This is due to the location and the major functions of this area, which basically constitutes the CBD of the city, with ‘headquarters’ and central administrations of large banks and insurance companies, which have subsequently attracted offices of financial services firms. The magnificently decorated cashiers halls of some banks are the visible signs of the high concentration of floor space dedicated to the financial services industry in this neighbourhood. The sector of ‘Food & Groceries’ is becoming more dominant in the Western Supplementary Zone. In the ranking of consumer goods, goods of short term needs hold the lowest position. Subsequently, they concentrate in shopping streets and centres with local supply function. In the hierarchical system of shopping streets in the historic city centre a similar spatial organisation can be observed. With increasing distance to the Main Shopping Area the share of businesses operating in the ‘Food &Grocery’ sector is increasing. This also affects chain operated stores and supermarkets, which have been replaced in the Main Shopping Area and in the specialized expansion zones bordering the Main Shopping Area.

Garment district

48In the northwest, at today’s ‘back’ of the historic city centre, some remnants remain from an old garment district. The name of this district originates in its historic concentration of garment wholesale businesses. Due to global changes in the garment industry, most of the stores of the garment wholesalers have been closed down and abandoned. Today this part of the city is characterised by the highest percentage of blight phenomena, almost every third shop is vacant.

49At the level of the historic city centre, with an average of 9 %, the share of commercial blight – abandoned, vacant, closed down or not recently used stores –- seems to be rather high. But the spatial pattern of ‘Commercial Blight’ shows a very unequal distribution. In the dynamic and vibrant centre of the ‘Main Shopping Area’ but also in the specialised surrounding districts, the share of vacant stores is below average and increases with growing distance to the Main Shopping Area.

50The numerous vacant businesses in the Garment District can partly be explained by the fact that the Garment District is rather distant from the main shopping area and the major tourist destinations. Furthermore, it is not easily accessible by public transport. With regard to the supply of goods, rather large-scale retailers offer wares of long-term consumption, such as home furnishings and textiles. In comparison there are fewer clothing stores and service firms. The relatively large number of cafes, bars and restaurants can be explained by the numerous office workers in nearby offices and the expanding leisure district in the east.

51Concerning the phenomena of Commercial Blight, it can be concluded that the restructuring of retail by international chain operated stores enables downtown Vienna to keep up with shopping centres in the suburbs and other inner city shopping malls. These enterprises are the dynamic forces that provide niches and market segments for complementary retail functions.

Figure 7. Distribution of ‘Commercial Blight’ by enterprises.

Figure 7. Distribution of ‘Commercial Blight’ by enterprises.

Conclusion

52The transformation of the historic city centre into a leisure shopping destination where the city becomes consumed has shaped the retail structure into fragmented patterns of specialised areas. The upward hierarchical movement of retailers with competitive advantages has resulted in a concentration of multinational corporations, accompanied with a decrease of retailers with lower rent pay capacities. The Main Shopping Area is affected most by multinational corporations. This process has brought about a decline of traditional individually owned shops, which used to be typical of the unique atmosphere of the city. Retail premises in the Main Shopping area have been removed from their historic and unique conditions and replaced by the ‘economy of signs’.

53Subsequently the restructuring process reduced the vitality of the historic city centre at the level of streets in terms of an increasing specialisation of distinct shopping districts as well as at the levels of shopping streets Like the businesses, ‘vitality’ has been moved upwards to a higher spatial level. If the historic district is regarded at the level of the functional districts and the entire historic city centre, a new form of a ‘vitality’ of different specialised areas with a new spectrum of retail sectors is emerging.

54As multinational corporations concentrate in the Main Shopping Area of the historic city centre niches and opportunities for highly specialised supplementary zones to develop in its vicinities are provided. If the city is to remain an attractive shopping location, it cannot be isolated from its tendency of turning into a leisure shopping destination. The restructuring of retailing in the historic city centre has to be regarded as an economic condition the historic city centre has to face and find ways of coping with it. Those searching for a unique atmosphere will certainly find it off the ‘mainstream’ and in the peripheral locations of the historic city centre. It should also be taken into account, however, that preserving or even developing a new ambience is only possible if it is supplementary to the changes the main shopping district is going through.

55Internationalisation of retail in the Main Shopping Area can be considered as crucial in the competition between the historic city centre and shopping malls in the outskirts and suburbs. As the same chain-operated stores can be found in both locations, the position of the malls weakens. At the same time the concentration of chain-operated stores facilitate an increasing and visible split of functions between cities and newly developed shopping malls. However, the influx of chain-operated stores is accompanied by a process of trading down, their sheer presence and concentration encourages those city functions which represent the functional separation and which can hardly ever establish themselves in shopping malls. ‘Arts & Craft’ or ‘off mainstream’ businesses will hardly be found in suburban shopping malls. It is exactly this division of functions which increases the competitive advantage of the historic city centre as a ‘unique’ shopping destination that appeals to a large number of customers. Until now the interplay of competition and complementarity has ensured Vienna’s historic city centre its prime position as shopping location.

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Notes

1 In this context Ms D. Schönbichler is to be thanked for the translation into English as well as for reviewing the draft and making helpful suggestions.

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Table des illustrations

Titre Table 1. Retail and service industries in downtown Vienna 2004 by businesses, floor space and share of chain-operated stores.
URL http://belgeo.revues.org/docannexe/image/11027/img-1.jpg
Fichier image/jpeg, 84k
Titre Table 2. Shopping districts in downtown Vienna 2004 by businesses, floor space and chain-operated stores.
URL http://belgeo.revues.org/docannexe/image/11027/img-2.jpg
Fichier image/jpeg, 72k
Titre Figure 1. Shopping districts and main shopping locations in downtown Vienna.
URL http://belgeo.revues.org/docannexe/image/11027/img-3.jpg
Fichier image/jpeg, 460k
URL http://belgeo.revues.org/docannexe/image/11027/img-4.jpg
Fichier image/jpeg, 440k
Titre Figure 2. Distribution of ‘Fashion & Style’ by enterprises, floor space and chain operated stores.
URL http://belgeo.revues.org/docannexe/image/11027/img-5.jpg
Fichier image/jpeg, 40k
Titre Figure 3. Distribution of ‘Arts & Craft’ by enterprises, floor space and chain operated stores.
URL http://belgeo.revues.org/docannexe/image/11027/img-6.jpg
Fichier image/jpeg, 36k
Titre Figure 4. Distribution of ‘bars and restaurants’ by enterprises, floor space and chain operated stores.
URL http://belgeo.revues.org/docannexe/image/11027/img-7.jpg
Fichier image/jpeg, 40k
Titre Figure 5. Distribution of ‘Banks and Travel Agencies’ by enterprises, floor space and chain operated stores.
URL http://belgeo.revues.org/docannexe/image/11027/img-8.jpg
Fichier image/jpeg, 40k
Titre Figure 6. Distribution of ‘Food & Grocery’ by enterprises, floor space and chain operated stores.
URL http://belgeo.revues.org/docannexe/image/11027/img-9.jpg
Fichier image/jpeg, 44k
Titre Figure 7. Distribution of ‘Commercial Blight’ by enterprises.
URL http://belgeo.revues.org/docannexe/image/11027/img-10.jpg
Fichier image/jpeg, 25k
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Pour citer cet article

Référence électronique

Gerhard Hatz, « Competition and complementarity of retailing in the historic city centre of Vienna », Belgeo [En ligne], 1-2 | 2006, mis en ligne le 13 janvier 2014, consulté le 23 mai 2017. URL : http://belgeo.revues.org/11027 ; DOI : 10.4000/belgeo.11027

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Auteur

Gerhard Hatz

Department of Geography and Regional Science, University of Vienna, Universitaetsstrasse 7, A-1010 Wien, Austria, gerhard.hatz@univie.ac.at

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