Helsinki's retail heart struggles to recover post-pandemic, losing over 100 stores

Helsinki’s central retail district is grappling with a significant decline in business activity, failing to return to pre-pandemic levels by the end of 2023. According to a recent study by the Helsinki Region Chamber of Commerce, the number of retail

By: helsinkitimes.fi

Jul 27 2024
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Helsinki's retail heart strugg

Helsinki’s central retail district is grappling with a significant decline in business activity, failing to return to pre-pandemic levels by the end of 2023. According to a recent study by the Helsinki Region Chamber of Commerce, the number of retail outlets in the city center has decreased by 20% compared to 2019.

The pandemic has had a lasting impact on Helsinki’s central retail area, identified by the postal code 00100.

Despite efforts to revitalize the district, its share of the Helsinki region’s retail revenue has steadily dropped, accounting for just 8% in 2023, down from 11% a decade earlier.

“The situation for retail in the city center is challenging,” remarked Markku Lahtinen, Director of Advocacy for the Helsinki Region Chamber of Commerce. “Since 2019, 137 retail outlets have disappeared from the central area, resulting in a revenue loss of approximately €200 million.”

In contrast, the outer districts of Helsinki have seen retail revenues grow despite the pandemic. The opening of the Redi shopping center in Kalasatama in 2018 has positively influenced this growth. However, the combined retail revenue share of both the inner and outer central zones has decreased to 20% of the total for the Helsinki region in the 2020s.

The decline in central Helsinki's attractiveness is also evident in the restaurant sector. While overall restaurant revenue in the Helsinki region and outer central zones has surpassed late 2010s levels, city center restaurants have yet to reach their previous peak.

To make Helsinki’s city center vibrant and appealing, Lahtinen emphasizes the need for a diverse mix of services and industries. "A varied service and industry structure requires an increase in the number of people visiting the city center. Enhancing car accessibility, alongside improving public transport connections, is crucial for ensuring the necessary customer flow."

The Helsinki Region Chamber of Commerce opposes converting Kaivokatu into a public transport-only street, arguing that the area needs two cross-city car routes to remain functional.

The Chamber’s study, conducted by Kaupunkitutkimus TA Oy, utilized data from Statistics Finland. The central retail area of Helsinki, known as the Aleksanterinkatu area, corresponds to postal code 00100. The outer central zone includes postal codes 00102, 00120–00180, 00220, 00250, 00260, 00500, 00510, 00530, 00540, 00550, and 00580. The Helsinki region encompasses a cooperative area of 14 municipalities, including Espoo, Vantaa, and others.

As Helsinki navigates post-pandemic recovery, the city’s stakeholders are keenly focused on strategies to restore the central district’s former vibrancy and economic health.