Small Shops in Italy Close at Accelerating Rate as E-Commerce and Tourism Reshape Cities

In Italy, more than 156,000 small shops have closed permanently between 2012 and 2025, according to a recent analysis by the Confcommercio Research Office covering 122 Italian cities. The rate of closures has accelerated, with an average annual decline of 3.1% in 2025 compared to 2.2% in previous years. This trend is especially pronounced in northern municipalities, where many commercial spaces now stand empty.

At the same time, the hospitality and restaurant sector has grown, adding 19,000 new businesses over the same period. Restaurants have increased by 35%, while delicatessens, ice cream parlors, and pastry shops have grown by 14.4%. The most significant rise is seen in alternative accommodations, such as short-term rentals, which have surged by 184.4%. These changes are largely driven by shifts in consumer behavior.

Online sales now account for 11.3% of total goods purchased online and 18.4% of services in 2025. This growth in e-commerce has contributed to the decline of physical stores and changed the structure of commercial offerings across Italian cities. Between 2015 and 2025, the overall retail sales index rose by 14.4%, but small retail spaces saw no growth (0.0%), while online sales nearly tripled (+187%). In monetary terms, online sales grew from €31.4 billion in 2019 to €62.3 billion in 2025, doubling in just six years.

The composition of economic activities in Italian cities continues to shift toward tourism-related businesses, particularly short-term rentals and restaurants. The number of tourist accommodations often increases at the expense of traditional hotels, while some bars are reclassified as restaurants.

Regionally, the analysis shows that southern cities experience less orderly but more dynamic business development. Bed and breakfasts have almost quadrupled in historic centers since 2012, with a rise of 290% compared to a 147% increase in central and northern regions.

Traditional retail sectors have seen widespread declines: newsstands are down by 51.9%, clothing and footwear stores by 36.9%, furniture and hardware shops by 35.9%, and bookstores and toy stores by 32.6%. Bars and street vendors are also decreasing, reflecting a contraction in traditional urban commerce.

In contrast, some service-oriented businesses tied to tourism are growing: restaurants (+35%), delicatessens, ice cream parlors, pastry shops (+14.4%), and especially alternative accommodations (+184.4%). Pharmacies (+9.8%) and computer/phone shops (+7.9%) also show moderate growth.

Foreign-owned businesses continue to play a significant role in commerce and public services, increasing by 134,000 units from 2012 to 2025 while Italian-owned businesses declined by 290,000 during the same period. These foreign-run enterprises have added about 194,000 jobs but tend to remain smaller on average (from 1.9 employees per business in 2012 to 1.7 in 2025), compared to Italian firms whose average size grew from 2.4 to three employees.

There is also a shift toward more structured business forms: joint-stock companies now represent a larger share of retail (from 9% to 17%) and hospitality/restaurant sectors (from 14.2% to 30.6%), while sole proprietorships and cooperatives are declining. This points to a gradual move toward greater organization and efficiency within Italy’s service sector as it adapts to changing consumer habits and market conditions.