Leave a comment
Be the first to add a comment.
Nearly six months after we’ve all been encouraged to return to the office, many have moved back to their desks at least a few days a week, but daily commutes are still not as busy as they used to be. The same can be said about the queues for morning coffees, lunchtime sandwiches or evening drinks after work.
Centre for Cities latest briefing, published today, looks at the impact homeworking is having on local businesses, how that varies between places, and the prospects high streets face if workers don’t return. Here’s a summary of what it says.
Before Covid, workers were an essential part of the customer base for many local businesses up and down the country. A number of metrics suggest that higher worker footfall increased the size of overall spend on the high street, and made it more vibrant as a result. For instance, economically stronger city centres that had lots of high-skilled, high-paid workers (like London, Reading or Manchester) had much lower vacancy rates, better amenities, and more jobs created in the local services sector than places with a weaker city centre economy, such as Wigan or Barnsley. In the latter group of cities, the lack of jobs (well-paid in particular) made it more difficult to sustain high street amenities.
Specifically, the food and drinks sector directly benefitted the most from daily inflows of office workers, as they spent money on lunchtime sandwiches or after work drinks (Figure 1).
When the pandemic hit, it disrupted this relationship by decoupling jobs from the office and its surrounding high street. Those stronger city centres with lots of office jobs were inevitably much more vulnerable to (and hit harder by) restrictions and shifts towards homeworking – as Cities Outlook 2022 has shown.
Since the economy reopened, many have returned to the office, but working patterns are clearly different from what they were pre-pandemic, with many more people choosing to work either on a hybrid or full-time remote basis. In London, for instance, weekday footfall was by the end of March still about 40 per cent down on its pre-pandemic levels (this has improved in recent months, but is still well below pre-pandemic levels).
This has had a clear impact on weekday sales on the high street: demand in places that relied the most on office workers remains lower than before and, reflecting pre-pandemic patterns, it’s the food and drinks sector that continues to bear the brunt (Figure 2). In London, Reading or Milton Keynes, for instance, weekday sales in the sector are still 15 to 20 per cent down – while in Bradford, Burnley or Doncaster, they’ve bounced back to their (albeit low) 2019 levels.
Not all places are evenly affected by shifts to homeworking. It’s stronger city centres which had lots of jobs in them pre-Covid that are likely to see their short to medium term fortune tied to the return of workers. The picture is improving as more workers seem to be returning, but if this ‘new normal’ settles at a lower level than the pre-pandemic norm, it will be the food and drink sector that will be affected the most.
This doesn’t need to be a problem in the long term, as places can and will adapt to changes in the nature of demand, but the road to get there might be bumpy.
For policy makers wanting to improve the outlook for high streets in both strong and weak city centres, the focus should be on attracting more jobs into the centre. Making city centres a more attractive place to do business – for instance, by investing in skills – should be a priority. It may be that the workers in these jobs will not come in five days per week, but increasing the overall number of people commuting into the city would increase the size of the market that food and drink and other high street businesses can sell to. Beyond this, policymakers should help their places grow and adapt to a reconfigured demand. Supporting the repurposing of vacant units and providing greater flexibility as to how space is used – whether office, commercial or residential – will be essential.
Be the first to add a comment.