Following the publication of the latest British Retail Consortium/KPMG Retail Sales monitor, which reported a 3.2% increase in retail sales in July nationally, CACI, the consumer and location intelligence specialist, has provided a more detailed picture of the negative impact working from home is having on retail and F&B sales performance in London specifically.
According to recent research by Morgan Stanley, only around a third of UK workers are back in their offices. Londoners in particular are far more likely to still be working five days a week from home than those with similar jobs in other European capitals. This is despite the government dropping its ‘work from home’ advice from the beginning of August.
Such consumer behaviour has a significant impact on retail and F&B spend in the capital. While London accounts for 18% of all retail and F&B spend in the UK, 33% of worker spend in the country is from people working in London locations. This equates to over £3 billion annually. Further, six of the top ten locations for worker spend in the UK are in the capital, while more than half of the top 50 worker spend locations are in London.
The London locations in the top 50 are also more heavily reliant on worker spend than their counterparts across the country. The average worker spend per location outside London is £64 million, or 24% of total spend. In the capital, the figures rise to £73 million and 41% respectively.
Alex McCulloch, Director of CACI, said: “Our analysis quantifies the value of workers to the capital and the detrimental impact working from home is having on London’s economy. While retail sales are on the increase nationally, the UK’s longstanding retail and F&B powerhouse is lagging behind by some margin. Without a significant return to offices in the capital, operators and landlords alike face an uncertain future that will have a detrimental effect on the UK as a whole.”
Jace Tyrrell, Chief Executive of New West End Company, representing West End businesses, commented: “CACI’s latest analysis brings to life just how profound the impact is from the lack of worker spend in our cities, and in particular London. It is crucial we support getting our office workers back safely, but en masse. While the Covid-19 crisis has changed how the West End operates, it does not mean we should not be operating at all.”
The results on worker spend potential, follow recent news that CACI has launched its new performance lease model to aid the retail sector earlier this month.