Italian cities lose local shops as tourism and online retail surge
Across Italy, the familiar streetscape is undergoing a dramatic transformation. A recent study by Confcommercio reveals a staggering decline in small shops and street vendors – nearly 156,000 vanished since 2012, and the trend is projected to continue until 2025. This represents over 25% of traditional retail outlets, signaling a fundamental reshaping of commerce.
The shift: from neighborhood hubs to tourist destinations
The data paints a stark picture, particularly in northern Italy. Once vibrant streets now bear the emptiness of vacant storefronts. The rate of closures is accelerating, with annual losses expected to reach 3.1% by 2025, a jump from 2.2% in previous years. Newspaper vendors were hit hardest, losing over half their numbers. Clothing and footwear retailers saw nearly two out of five disappear, while furniture and tool sellers dipped just under 36%.
This isn't limited to brick-and-mortar stores. Sidewalk stalls and traditional drinking spots have also thinned, contributing to quieter neighborhoods. This contrasts sharply with the boom in hospitality and online commerce. Between 2012 and 2025, lodging firms expanded by approximately 19,000, and restaurants jumped by 35%. Non-traditional accommodations, especially short-term rentals via platforms like Airbnb, experienced the most explosive growth – a staggering 184.4% increase.
Southern historic districts witnessed an even more pronounced shift, with guesthouses multiplying nearly fourfold (+290%), significantly outpacing the 147% growth in the north and central regions. The change isn't simply about new businesses; it reflects evolving consumer habits. As tastes shift, urban spaces are adapting, with tourism increasingly filling the void left by local shops. The rise of short-stay guests has outpaced the decline of traditional longer-stay visitors. The economics are simple: dining out gains traction while older lodging models retreat. A former bar might now prioritize serving meals, driven by the numbers.
The rise of online shopping is a central driver of this transformation. By 2025, digital platforms will account for 11.3% of goods purchased and 18.4% of services consumed. General retail sales have increased by 14.4% between 2015 and 2025, yet physical stores in smaller areas have seen no growth during this period. Online sales revenue has soared from €31.4 billion in 2019 to €62.3 billion six years later. Projections estimate total consumer online trade to reach around €62 billion by 2025.
However, not all sectors have followed this trajectory. Pharmacies have seen a 9.8% rise, reflecting consistent demand for healthcare products. Computer and telephone shops experienced a 7.9% gain, fueled by ongoing interest in technology. The composition of businesses is also evolving. Firms owned abroad have increased by 134,000 since 2012, creating roughly 194,000 jobs, albeit with fewer employees per company (down from 1.9 to 1.7). Native Italian ventures, conversely, have declined by 290,000, though those remaining have expanded, averaging 3 staff members each.
Corporations are claiming a larger share of the retail landscape, rising from 9% to 17%, alongside lodging and dining, which have jumped from 14.2% to 30.6%. Single-owner businesses and small groups are losing ground. This shift suggests greater structural strength, sharper management, and improved productivity as industries adapt. Beginning in the mid-decade, southern urban areas have seen uneven shifts, with tourism outpacing northern regions, but the decline in shopping activity has been more severe in the north.
The transformation is sweeping through Italian city centers, reshaping traditional markets into tourist-oriented spaces shaped by digital trends. While hotels and e-commerce generate energy, some neighborhoods lose their corner shops, potentially weakening community bonds. The key to navigating this change lies in adapting regulations to support the small traders who continue to thrive amid these broader shifts. How well cities adapt will depend not only on growth but also on preserving the fabric of daily life. The numbers are clear: Italy’s retail landscape is undergoing a fundamental restructuring, one that will reshape its cities for years to come.