- Working partly from home is expected to become the norm
- Between $14.6M and $32.8M less income per week for CBD based retailers
- Non CBD retailers may see an upside, however
It appears the pandemic induced shift to ‘work from home’ (WFH) could have a major impact on our city centres, according to new research released by the PAR Group.
The research predicted that the office workers would WFH one or two days a week. Researchers Rob Ellis and Damian Stone believe this shift will likely become one of the significant legacies of Covid.
Given the taste of the flexibility that comes with working from home, employers are under pressure to cater for flexibility in the workplace.
One day a week WFH would result in 970,000 fewer office workers in Australia’s six biggest CBDs per week. Two days would mean 2,190,000 fewer office workers per week.
Estimated Weekly Office Workers – Australian CBDs
Less traffic and fewer crowds may seem appealing, but there could be a dramatic impact on CBD retailers.
If office employees WFH one or two days a week, there would be an estimated $14.6 million or $32.8 million lost per week respectively in city tills.
This would correlate to between $730 million and $1.6 billion less income for CBD retailers every year.
These estimates are based on the conservative estimate of office workers only purchasing a lunch and coffee equating to $15 while in the CBD. The reality is that office workers also purchase non-food items while in the CBD.
Food and beverage retailers are predicted to be the hardest hit in the long term.
Potential Lost Annual Retail Spending – Australian CBDs
“CBD-based retailers, which rely heavily on the daily office workforce, will bear the brunt of widespread adoption of working from home,” the report said.
“Combined with potential impacts of fewer international visitors and less business travel, many CBD based retailers may find it problematic in adjusting to the new economic paradigm.
“Higher vacancy rates and lower market rents are likely, at least in the short term, in the CBD retail markets.”
Rob Ellis and Damian Stone, PAR Group
A silver lining to the suffering of CBD retailers will likely be the non-CBD food retailers. Local neighbourhood cafes are already benefitting from the WFH shift.
