Hopes for city centre retail as more than half of workers return to workplaces

By

Sandra Halliday

Published
Mar 19, 2021

New statistics offer signs of hope for beleaguered city centre and town centre retail after months in which the absence of office workers has meant historically low footfall.

The Office for National statistics (ONS) said that more than half of UK employees travelled to work last week. That's the first time this has happened since last June. And given that back in June, many consumers were more nervous about going into physical shops even when they were in close proximity to them due to them being back in the office, it could suggest retail sales will benefit.

The ONS said that 53% of workers travelled to the workplace at least once in the week ending March 14, this was up from 48% in the previous week and comes after earlier increases.

The biggest catalyst for the return to workplaces was the reopening of schools in Britain with schools in England, for instance, opening their doors again on March 8.

Evidence so far suggests that schools going back have boosted sales of previously sluggish categories such as footwear and this is likely to be repeated as adults get out and about more. More formal clothing categories should also get a boost.

That said, shops in city and town centres will continue to face significant challenges as working from home becomes a lot more commonplace, even in normal times. Many companies have announced that their staff won't be required to return to the office for quite a few months yet and others are shifting to a hybrid model that will see staff working from home one or more days a week.

For instance, last year, Hugo Boss announced a three day in-office week for HQ staff.

But longer term, developers clearly expect high demand for office space, particularly in flagship locations. Retailers John Lewis and M&S have both lodged plans for their Oxford Street, London, flagships to convert upper floors to office space. And with the large number of vacated department stores in towns around Britain coming onto the property market, one of the key conversion areas for them is to create extra office space. That should also combine with what’s expected to be a boom in more casual co-working space in the years ahead. 

Regardless of how the space is configured, the important point about it is that it should encourage more people into town and city centres, benefiting the retailers that have taken space there.

And such a boost is sorely needed. Springboard’s latest weekly football results on Monday, for instance, showed that footfall in central London remains down almost 80% year-on-year, while regional cities are down nearly 74%, market towns are down over 53% and so are coastal towns. But many of those locations are seeing footfall rising week-on-week, and a return of office workers should eventually help the year-on-year figures gets to a much happier place.