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City centre retailers dependent on commuters, reveals Deloitte

Mar 11
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The city centre retail economy is dependent on the traditional office worker, according to Deloitte, which has analysed data from the first lockdown. It found the reopening rate in commuter and seaside towns was significantly better than city centres once restrictions were eased on June 15th last year.

With many people continuing to work from home in the aftermath of the first lockdown, city centres saw a 83 per cent reopening rate compared to seaside towns’ 91 per cent. Commuter towns and local villages both also experienced a higher reopening rate than the 85 per cent national average, at 89 per cent and 88 per cent respectively.

Conversely, internet retail responded opportunistically to physical shops closing and peaked with 33.3 per cent of all sales at the height of the first lockdown. The pandemic has therefore exposed the extent of the difficulties faced by large department stores and shopping centres to remain profitable.

High streets have always been difficult to define due to their lack of monoculture. On average, retail represents just 29 per cent of the high street, with the rest consisting of residential premises, offices, leisure and community spaces. In the wake of the pandemic, Deloitte suggests that such diversity could prove to be the high street’s strength, as the landscape has changed fundamentally.

One trend that has emerged as a result of more people working from home has been localisation. The prospect of buying items on local high streets as opposed to commuting to larger towns or cities has opened up the eyes of many consumers to the quality of produce available to them nearer to home.

This has led to an increased level of loyalty to local businesses, which is likely to continue once Covid restrictions are lifted. In fact, a survey conducted recently by Deloitte showed that 57 per cent of consumers are more likely to spend money on locally-produced items post lockdown.

As the acceleration of working from home brought about by the pandemic is likely to have a lasting impact on going into offices, this will impact retail. It’s predicted that more people will carry out work tasks at home once or twice a week when things return to normal. This could potentially move 20 per cent of lunchtime and evening discretionary spending from city centres to suburban high streets.

This will no doubt have an impact on traditional city centre retailers, which are likely to see a reduction in turnover and profitability. As adapting to survive is an important feature of business, some of these retail offerings may be transplanted to local high streets to cater to home workers instead of commuters.

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