Shopping patterns reveal pandemic winners and losers
Knight Frank’s latest retail note provides a fascinating analysis of current retail spending patterns in the UK. Retail sales have returned to pre-crisis levels and, for once, London is the laggard with footfall running at only 20% of last year’s levels. 46% of spend in London is normally tourists and 9% is office workers, both groups that are now largely absent. It is workers that drive hospitality spend so with only 53% of all UK workers having returned to the office, retail sales in London remain suppressed.
A return to better times for London may take time, particularly as a number of companies including Schroders and PwC have announced that working from home will become more permanent. At Mayfair Capital, we are returning to the office on a split team basis from 1st September.
The corollary to weakness in London is increased spending in local high streets boosted by stay at home workers. At the same time, non-food online sales are decelerating as shoppers return to in-store purchases.
These figures reinforce Mayfair Capital’s longer term key thematic perspective: occupier and consumer dynamics are changing but the long term trends, which will bring increased flexibility to the way we work and shop, remain unchanged. As a result, portfolio composition remains critical to future property out performance.