Work-life balance

Perhaps the most significant paradigm shift due to the pandemic is the increase in homeworking, which will undoubtedly impact on city centre office and retail markets. There are diverging attitudes on whether jobs can be performed as well remotely and it is becoming clear that the type of role, the company culture and the individual’s personal circumstances will all play a part.

For some, the workplace is a hub for creativity, collaboration, learning and social activities, and an opportunity to escape the isolation that can come from home working. However, for those with families, long commutes and access to outside space and amenities in their local area the benefits of more flexible arrangements are obvious.

The long-term outcome is likely to be a blended approach of agile working. Savills Office FiT survey has found how attitudes to homeworking have changed dramatically since the onset of the pandemic. Pre-Covid, less than 20% of office workers had the preference to work at home more than one day a week. Now over 80% want to work at home at least two days a week (see chart, below).

The rise of localism

Covid-19 has also highlighted the importance of convenience and purpose-driven shopping; a trend that, through the pandemic, has supported resilience across retail parks, supermarket anchored schemes and smaller high streets over shopping centres and major city centre retail. We have long advocated the importance of community retailing, having tracked the ongoing polarisation between destination and convenience-based trips that have prevailed over the last decade. Convenience trips are typically local, frequent, essential and functional, whereas destination trips more experiential, indulgent and leisure-based. It is clear which element was more suited to a country in lockdown.

More time spent in the area of residence is having a profound impact on the footprint of local high streets. Lockdowns have forced consumers to explore their local area, and as we move towards a post-Covid world, the appetite for independent retailing and supporting the local community is expected to persist. Barclays estimates 17,000 new local stores will open in the next year alone. Again, while the pandemic has been a catalyst for change, these trends were emerging already. The adoption of the 15-minute neighbourhood principals by local authorities is likely to see further improvement in infrastructure, living, working, and social space that will continue to build resilience at the local level.

So where does this leave destination and city centre retail? Per capita visitation in these locations was already far lower compared to local places, but individual trip spend is three times as large and will continue to be the most lucrative store locations for many brands. There is little doubt that there remains an important place for prime retail and leisure destinations in the long term. Some things, experiences in particular, cannot be delivered online, and convenience-based places often lack the infrastructure or footfall to support all kinds of retail and leisure uses. Major structural changes will see destination retail need to reduce the floorspace they currently occupy, but prime retail and leisure uses will remain at their heart.

_{Read the articles within Spotlight: UK Retail Outlook Report  below.}