Have suburban high streets really received a ‘work from home’ boost?

On your working-from-home days do you pop to your local high street to grab a coffee and lunch, perhaps even pick up a birthday present from that lovely new independent selling house plants in beautiful pots because you forgot to order something online?

No? Just me then.

The pandemic reinvigorated interest in community and what is local. One of the oft-repeated ideas this fuelled is that there has been a rise in spending on suburban high streets at the expense of city centres, and that this is due to more people working from home and spending time and money locally.

However, new analysis from thinktank Centre for Cities questions whether the data really supports this claim.

Analyst Valentine Quinio says suburban high streets have certainly had less of a rough ride than city centres during the pandemic: on average, city centre high streets lost 28 weeks of sales between March 2020 and September 2021, while in suburbs this was much lower at just nine weeks.

Vacancy rates have risen at a slower rate in suburban high streets too, up 1% during the pandemic versus 3.3% in city centres. And suburban spending was quicker to return: by September 2021, suburban spending had bounced back to its pre-pandemic levels, while in city centres it was still lagging behind.

Status Quo

Quinio says that a closer look at the data, compiled by Beauclair and averaged across 63 cities, shows that suburbs were not massively outperforming their own pre-pandemic position, however. “In September, consumer spending was just 5% above its baseline, so not quite a boost: the level of demand for local cafés, shops and restaurants has not changed much,” he says.

What’s more, there simply are no signs of a work-from-home dividend for suburban high streets. “The other underlying assumption behind this ‘suburban revival’ was that working from home would benefit suburban high streets because of a ‘Zoomshock’ effect, and that the city centre’s loss was the suburb’s gain,” Quinio says. “The thinking went that, instead of going out to Pret at lunchtime, former city centre workers would pop to their local coffee shop instead. But the data does not support this.”

In fact, last September, the suburbs of cities with high levels of remote working did less well than those with low levels of remote working (see figure 3). The likes of Blackpool, Hull and Barnsley, with a low level of working from home, did well; but in the suburbs of Cambridge, Reading and Milton Keynes, where more people shifted to remote working, consumer spending is still below pre-Covid levels (see figure 4).

Essentials vs non-essentials

So what has really been happening on suburban high streets?

Quinio says they have tended to do better than city centres because they tend to sell more locally, and more essential goods. Covid restrictions were less likely to shut down trading in suburban high streets because of the nature of their offer. Pre-pandemic, nearly two-thirds of all sales occurred in essential sectors such as groceries or fuel for vehicles. By contrast, in city centres half of sales were made on non-essentials such as bars and restaurants and fashion, which have been directly impacted by forced closures.

“Corner shops and small restaurants can turn a profit on a neighbourhood customer base, and so they can be found throughout the suburbs. But more specialist amenities require a larger customer base to work,” Quinio says. “This is why the provision of amenities in city centres tends to be broader, and why more specialist amenities are found there too. It’s also why companies like Pret proliferate in city centres but aren’t found in less dense suburban areas. Given this, a ‘Zoomshock’ bonus for suburban high streets seems unlikely.”

Return to the office

Quinio’s findings ring true with Graham Fawcett, co-founder of retail agency Fawcett Mead, who says the situation is further compounded by the return to the office.

“There was certainly a boost initially in 2020 and 2021, but since late January there has been a massive return to the office – my train was standing room only this morning,” Fawcett says. “Also, suburban centres can only provide some of the required services. I have noticed that Fridays are busier, but the rest of the week they have a pre-pandemic feel now.

“There are lots of new lettings and new investment demand in commuter towns, and restaurants and coffee shops are replacing charity shops. In my opinion, this is because the town centre retail market is improving rather than the increase of working from home.”

Adam Coffer, managing director of specialist leisure and retail property investor EPF Group, says he has always focused on “affluent suburbs where people have a reason to get off their backsides for leisure and shopping”.

“I do not believe that working from home is the driving force to the stronger performance of such suburbs; nor do I believe we can generalise about ‘every’ suburb or town or high street,” says Coffer. “Put simply, if the town is compelling and harnesses local demand and loyalty, it will perform.

“The key criteria is not whether there is an abundance of people choosing to work from their loft conversions or sheds a couple of days a week – it is whether your high street makes you, as a consumer, wish to click a button on your phone to receive an item you need or prefer to have a mooch around in person, pick up that item and maybe take in a bagel and a coffee with a pal while you’re there.”

Delivery challenges

The hope that working from home can boost suburban high streets is not about to disappear. How councils can help create resilient and revitalised high streets was the focus of a recent report commissioned by the Local Government Association from economics and strategy research consultancy Pragmatix Advisory and futures experts Trajectory. Among other things, the report highlights the opportunity for high streets in feeder towns and suburban centres to benefit from increased footfall and a new higher-spending weekday demographic because of fewer commuters leaving home during the day. Sound familiar?

But it also acknowledges the significant challenge in delivering on this, including the current squeeze on real incomes and rising living costs; and the crucial fact that opting to use those services offered by high streets is discretionary – consumers can find the same things online and elsewhere.

“A broader, high-value offer with convenience and flexibility on the high street is likely to be required in the future to match the interests of new potential visitors,” the report says. “High streets in suburban centres and small towns can offer a long-term walkable alternative to major urban areas, if they can remain engaging and accessible enough.”

Creating flexible working spaces and active transport may be some of the potential solutions. But that “if” remains a big one – unless you have a thing for picking up house plants in expensive pots when you grab that coffee.