More than 400,000 high street jobs could go as commuters shift to home working, says KPMG

More than 400,000 jobs could be lost on the UK’s main roads as consumers continue to shop online and research shows that commuters work permanently from home most of the time.

Analysis by economists at KPMG suggests that after the pandemic, a shift towards home working will be permanent as highly competitive businesses take advantage of the opportunity to cut their rental costs by cutting down on expensive downtown office space.

The authors predict that, for the most part, offices will become “collaboration centers,” where many employees meet instead of sitting at desks and perform tasks individually that can be effectively done at home.

KPMG estimates that this will reduce the flow of commuters into cities by 10 to 27 percent before Covid.

The level in each city is expected to depend on the proportion of workers in jobs that can be effectively carried out from home.

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For example, in Hemel Hempsted and Bracknell, around 27 percent of work is done from home, compared to 12 percent in Scunthorpe and Plymouth.

This will hurt retailers and restaurants who rely on commuters for sales that impact downtown jobs. Business support services – from taxis to gardening to security – are also likely to see lower demand.

According to KPMG, main streets could lose between 20 and 40 percent of their stores, cafes and other businesses as people drive less downtown and shop more online. This would affect up to 5 percent of the local workforce and more than 400,000 jobs.

The behavior change is also likely to create opportunities for new jobs, but the government needs to help rethink the purpose of city centers, the report said.

According to KPMG, larger cities are likely to weather the changes better than smaller cities because they have more cultural and hospitality venues that attract visitors.

“The challenge for the government is to incorporate the changes brought about by the pandemic into its strategy as it focuses on the leveling agenda,” said Yael Selfin, chief economist at KPMG UK.

“The pandemic has added a new dimension to the level-up agenda. While some of the most deprived areas may be less directly affected by the pandemic, having initially had a lower proportion of office workers and retail space in their centers, they have yet to rethink their growth path given the changes brought about by it.

“Our results only offer an insight into the starting point of the locations. It highlights some of those who may still have to develop new ways to attract people to their centers compared to others who are already relatively extensive.

“Covid-19 has made it imperative for places to electroplate their centers for the new way of life.”

Chris Hearld, Head of Regions at KPMG UK, commented: “When we move on from the pandemic, cities across the UK will need help and space to rethink the purpose of their centers.

“Fostering collaboration between businesses and local policymakers can help rethink the way to work, with a focus on low-carbon, more customer-centric and better-connected transport networks. It will be important to prioritize investments in high-speed broadband and 5G connectivity. ”

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