Towns in the south-east of England are likely to be among the worst hit by the retail fallout of the COVID-19 pandemic, with as many as 400,000 job losses possible. A report by KPMG has examined the future of towns and cities after the threat from the virus has subsided and suggests that affluent commuter towns could see more than a quarter of their office workers continue to operate from home (27.4%) after the pandemic, dramatically reducing consumer footfall in these areas.

The report suggests that an increase in remote working and a rise in online shopping are likely to be part of the legacy of the pandemic, although some areas of the country are more affected than others. Some of the other 109 towns and cities included in the study – including Bradford and Huddersfield – have seen less home working overall because a greater proportion of jobs in these areas are unable to be done remotely.

Yael Selfin, chief economist at KPMG UK, said: “Towns and cities across the UK will need help and space to rethink the purpose of their centres. The high streets of the future will need to become multi-purpose locations, combining retail and hospitality amenities with residential, education, healthcare, cultural, technology, community and more. Office space will need to be transformed for three main purposes: collaboration, creativity and culture, with less space devoted to tasks that could be done remotely. Transport links will need to be reconsidered, as well as additional infrastructure needs. The pandemic has made it essential for places to galvanise their centres for the new way of living.”

Meanwhile, the latest retail sales monitor from KPMG and the British Retail Consortium concluded that 2020 was the worst year on record for retail sales growth. Physical non-food stores – including all of ‘non-essential’ retail – saw sales drop by a quarter compared with 2019. Helen Dickinson, chief executive of the British Retail Consortium, said: “Christmas offered little respite for these retailers, as many shops were forced to shut during the peak trading period. Though this led to a rise in food-based gifts as many shoppers bought what they could from the shops that were still open.

“With shops still closed for the foreseeable future, costing stores billions in lost sales, many retailers are struggling to survive. To avoid the unnecessary loss of shops and jobs Government should announce an extension to business rates relief for the worst-affected businesses as soon as possible. With many retailers making decisions over their future, the Government must act decisively.”

Paul Martin, UK head of retail at KPMG, added: “Further restrictions and the closure of many non-essential shops resulted in a dismal December performance for those retailers on the high street and conditions will continue to be challenging as we enter another national lockdown. Consumer behaviour will also continue to evolve and retailers must embrace the changes if they are to hold on to hard won customers and generate profitable sales.

“Looking ahead, fortunes will be mixed but pent-up savings and a successful vaccine roll out will help support recovery in the retail sector later in the year. Retailers will also be hoping that the reopening of high streets and shopping centres will see a return to more normal levels of footfall.”

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