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ICSC Announces Results of U.S. Office Worker Retail Spending Study

NEW YORK – Office workers comprise 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.

Survey Highlights:

    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 markets deemed to have limited offerings.
    The average weekly spending on goods and services is about $102 per week.  Of that the highest is grocery stores at close to $20 per week, followed by discount stores at a little over $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 – 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 P. 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 over the course of the year.  Moreover, office-worker spending increases by approximately 140% in markets with ample retail offerings over limited ones, suggesting that there is potential for additional offerings in these limited areas.

Niemira added that, “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.”  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 and 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 workweek on average.  Urban workers spent $166 per workweek, 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 workweek expenditures drops dramatically down 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, please visit http://www.icsc.org/srch/rsrch/wp/index.php and use the login ID, 1177584 and password, press2002pass.    

Founded in 1957, ICSC is the premier global trade association of the shopping center industry. Its more than 55,000 members in over 90 countries include shopping center owners, developers, managers, marketing specialists, investors, retailers and brokers, as well as academics and public officials. As the global industry trade association, ICSC links with more than 25 national and regional shopping center councils throughout the world. For more information, visit www.icsc.org.

 

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