City-centre pubs and cafes suffer as part-time working from home persists - The Telegraph

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Original source: The Telegraph
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Published: Apr 18th, 2022
City-centre pubs and cafes suffer as part-time working from home persists - The Telegraph

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“It really has to do with the concentrations of office workers, mainly in professional jobs, who will likely be doing a lot more work from home,” he said.
“A lot of people when they work from home do not have easy access to coffee shops or retail because they are all concentrated in the city centre, and are relatively sparse when you get out into residential areas,” he said.
“If people can work from home because of digital and all the rest of it, there is no reason to think they cannot also shop from home,” he said.
That depends on the presence of hospitality outlets in residential areas, which may not have existed pre-Covid when office workers were largely based in central locations.
It could be because of population density in residential areas that it is never appealing for supply to catch up with the change in demand.

City-centre pubs and cafes suffer as part-time working from home persists - The Telegraph

Pubs, cafes and restaurants in city and town centres stand to lose £3bn of spending a year as office staff continue to work some of the week from home. The typical worker will spend an extra day a week at home this year compared with their pre-pandemic habits, according to research presented at the Royal Economic Society last week. As many as 77,000 jobs in retail and hospitality could either be lost or relocated with a permanent reduction in the amount spent on coffees and lunches in central locations. Overall this amounts to removing 1.5pc of all retail and hospitality spending, but in areas with lots of office workers the proportion will be far higher. The City of London will be most affected, as the economists estimate spending could fall by almost a third. Jesse Matheson at the University of Sheffield, who conducted the research along with economists at the universities of Nottingham and Birmingham, said cities such as Leeds and Manchester will also be heavily affected. “It really has to do with the concentrations of office workers, mainly in professional jobs, who will likely be doing a lot more work from home,” he said. That means fewer obvious chances to buy a coffee while commuting or heading out to buy lunch from a cafe near the office. “The answer is likely to be, no they do not spend as much. You might find it more convenient to make your food and coffees at home now,” Mr Matheson said. “However, [home workers] do not get any kind of social interaction with people, so the idea of going out to a local coffee shop is very appealing.” Similarly money saved on a bus, car or train to work can also be directed to more little luxuries such as a meal at a local restaurant. That depends on the presence of hospitality outlets in residential areas, which may not have existed pre-Covid when office workers were largely based in central locations. More cafes and restaurants may be set up in the suburbs to cater for this shift in demand, but Mr Matheson said the economics of running a business away from town centres meant there was likely to be an overall drop in employment in hospitality as a result. “A lot of people when they work from home do not have easy access to coffee shops or retail because they are all concentrated in the city centre, and are relatively sparse when you get out into residential areas,” he said. “So in the short-run, there is really not the supply of these services in the residential neighbourhoods and it could take some time for supply to catch up. It could be because of population density in residential areas that it is never appealing for supply to catch up with the change in demand.” Kate Nicholls, chief executive of UK Hospitality, said city centre businesses have often changed their opening hours, closing on Mondays and Tuesdays when fewer commuters are around, shutting earlier on Fridays, but finding strong demand from weekend visitors. “When people do come in [to centres] there is an appetite to socialise with colleagues, perhaps eating out more,” she said. Andrew Carter, chief executive at the Centre for Cities, said there was evidence of a fall in spending in town and city centres, while businesses in suburbs have not enjoyed an additional boost from those extra home-workers. “If people can work from home because of digital and all the rest of it, there is no reason to think they cannot also shop from home,” he said. Meanwhile, Deloitte has scaled back its office space in London as part of its shift to more home working. The Big Four accounting firm is leaving a 185,000 sq ft building near Fleet Street in London, the Financial Times reported. Deloitte has now closed down 250,000 sq ft of office space in London over the past year, and it has also shut offices in Gatwick, Liverpool, Nottingham and Southampton. No jobs were lost with the office closure. The move comes after staff said in a survey that they only want to work in an office two days a week.
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