Office workers compose one-fifth of the nation’s workforce, so determining what they spend going to work, during the business day and immediately after work prior to returning home can provide a better understanding of the opportunities that exist for retail, restaurant and service establishments in proximity to office parks or buildings.
Those were the findings of a new survey, “Office-Worker Retail Spending in a Digital Age,” from the International Council of Shopping Centers (ICSC).
• Office workers account for approximately one-fifth (20.5%) of the U.S. workforce — or 28.5 million people.
• Office workers spend about $195 per week on all expenses associated with commutation and purchases on goods and services made within the vicinity of their office building.
• In markets deemed to have ample retail offerings, total spending was about 2.5 times higher than in markets deemed to have limited offerings.
• The average weekly spending on goods and services is about $102 per week. Of that figure, the highest is grocery stores at close to $20 per week, followed by discount stores at a little more than $10 per week.
• The largest single cost incurred by office workers is on transportation, which accounts for approximately 18% of total workweek expenditures.
• Online personal spending accounts for 15% of the typical average weekly expenditures, though this fluctuates greatly by market (with suburban having by far the highest total share of online spending).
“The study revealed that significant opportunities exist for some types of retailers, restaurateurs and service establishments, given low sales penetration rates with office workers,” said Michael Niemira, chief economist and vice president of research for ICSC.
The study found office worker spending on goods and services, and on meals, generates $184 billion during the course of the year. Moreover, office worker spending increases by approximately 140% in markets with ample retail offerings from those with limited options, suggesting that there is potential for additional offerings in these limited areas.
“The office workforce is an opportunity market that could provide a significant payoff for retailers, restaurateurs and managers of service establishments that increase their offerings to this segment of the population,” said Niemira.
Assuming there is no change in the average spending profile of the office worker, each one percentage point increase in share of spending by the office worker group will generate $2.7 billion in additional aggregate sales revenue for local businesses. It also will produce nearly $125 million of additional local sales tax revenue.
The distribution of office worker spending between the types of geography has some noticeable differences. The highest spending is by suburban workers, who spent $227 per work week on average; urban workers spent $166 per work week; while small-town or rural workers spent the least, at $143 per week.
The online spending is also worth noting. In that category, the share in suburban and rural markets is about 18% and 16%, respectively; while in urban markets, the share of online spending for total work-week expenditures drops dramatically, to about 8%.
Therefore, an opportunity exists for suburban and rural market retailers to leverage that distribution channel by providing the ability to order online in the morning and pick up at a physical store in the afternoon — for example.
For the complete report, “Office-Worker Retail Spending in a Digital Age,” visit www.icsc.org/srch/rsrch/wp/index.php and use the login ID (1177584) and password (press2002pass).