The impact of economic pressures on values driven consumers and repurposing real estate - weekly insight from PwC experts

Aug 27, 2020

This week’s topics: 

  • New data (published today) on the impact of economic pressure on values-driven consumers. 

  • Councils are proving the surprise players repurposing real estate   

  • Are the consequences of home working starting to filter into UK CEOs’ long term thinking about existing office accommodation models? 


What effect could economic pressures have on values-driven consumers?

Emma Cox, Head of Purpose at PwC UK, said:

  • Preliminary findings (published today) from the forthcoming PwC Purpose Survey highlight a disconnect between some consumers’ beliefs and their behaviour.

  • The research found the majority (56%) of the 2,000 respondents agree that how we spend our money is one of the most powerful ways to bring about change in society (33% neither agree nor disagree; 11% disagree). But almost the same number (54%) would buy products or services from an organisation that did not contribute to wider society if they were honest about it and their prices were competitive. This increases by age bracket - it’s true for 45% of 18-24 year-olds, through to 62% for those aged 65 and over. It’s more true for men (58%) than for women (51%).

  • In the face of a recession and climbing unemployment, it’s understandable that some individuals will prioritise monetary value over other values - particularly as more than one in ten (13%) already reports having reduced income during the pandemic.

  • While we all have personal responsibility and things are still very challenging in many industries, businesses can play our part by mitigating negative impact on the environment, and addressing issues in supply chains and other practices as we seek to repair and reshape our economy and society. For this to be a reality, businesses and government must work together to create an enabling environment. 

  • We’ve also seen the impact of the threat of empty shelves on customer behaviour. While consumers usually want quality, authenticity, and availability, in a crisis, the latter wins out.

  • In addition to cost (59%), other barriers to conscious spending are availability (51%), lack of time to research whether brands are doing good or bad things for society (40%), and pressure from others (23%). 


Councils are proving the surprise players in the market for repurposing real estate  

Ainsley Moore, Head of Real Estate Advisory at PwC UK, said:

  • As retailers reduce their footprint, landlords are left with empty units with irrecoverable business rates and service charges, as well as an increasing number of tenants on lower based turnover rents. Some are even starting to experience difficulties refinancing and instead landlords or their lenders will look to sell their assets. The issue here is finding a buyer - which is where many local councils are looking to step in. 

  • Although somewhat unlikely property speculators, councils are seeking new sources of revenues, and have a significant interest in transforming their local areas and keeping high streets alive.

  • While some councils are investing alone in retail property, others are turning to public-private joint ventures to help them navigate this, working alongside a private developer or investor who can bring the knowledge needed to make the development a success.

  • Local councils are increasingly looking at ‘place based recovery’ and are well positioned to take on these projects at the right price - and if other uses can’t be found, they can fall back on being the occupier of last resort. We may soon see shopping centres and retail properties evolving into public hubs with unused space converted into libraries, housing, health centres and even council offices. 


Are  the consequences of home working  starting to fundamentally filter into UK CEOs’ long term thinking about existing office accommodation models? 

Simon Hampton, PwC UK Real Assets leader, said: 

  • PwC analysis reveals how CEOs are preparing for the significant shifts in the ways we live and work -specifically the business model impact on construction, infrastructure, real estate and housing organisations as they respond to this ‘new norm’.

  • More than three quarters of UK CEOs (86% v 78% globally) see a long term shift towards remote collaboration. Three in four (77% v 76% globally) predict an enduring shift from traditional human labour to automation. 

  • Prior to the pandemic, we were already noticing a significant shift in the way people choose to consume - physical retail assets versus online, served via logistics warehousing for example - but with lock-down this home delivery trend has swiftly accelerated into food and perishable items with a new, often more elderly, buyer group joining the younger, tech-savvy generation. 

  • When you look at these retail shifts in tandem with our UK CEO responses - and in light of the world-wide test case for digital transformation and home working - it would be short-sighted to think it won’t result in different looking town centres and suburban areas in future. And this is certain to have larger real asset implications for the built environment with developers and investors needing to navigate this changing landscape.

Something to listen to: 


How does your personal life shape your professional life? Chris Keogh spoke to Dr Kamel Hothi OBE, NED at TLC Lions, and Laura Hinton, Head of People at PwC UK, to find out how their upbringings and cultures influenced the type of leaders they are today. Listen to the latest PwC How To Empower podcast episode here 


Something to watch:


Haydn Jones, Blockchain Director at PwC UK, joined this year’s Ethereum in the Enterprise 2020 to discuss how our blockchain platform, Smart Credentials, enables individuals to control their own credentials in a safe and secure way with the ability to share them at the touch of a button with a third party. Watch the recording here.


Something to read: 

Even with the return of some employees to offices, sustained flexible and remote working across the UK will have significant ramifications for transport services, and public transport in particular. With a clear public mandate to maintain the environmental benefits of reduced greenhouse gas emissions, there is also a unique window of opportunity to make our transport systems more sustainable. Read our latest insight

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Richard Pain

Richard Pain

Manager, media relations, PwC United Kingdom

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