Out the Box

Your appointment at aisle 14

Tesco is trialling offering up supermarket space to office workers.

Tesco has tied up with Regusowner IWG to pilot in-store flexible working areas, allowing office work to take place in redundant supermarket space.

WHAT’S THE BIG IDEA?

Some in the real estate industry could long see this coming; the Covid-19 lockdowns only accelerated the trend towards flexible working from literally anywhere and retailers are now testing the waters for more ways to exploit their big supermarket spaces.

The partnership will see IWG test out a 3,800st ft area on the first floor mezzanine within Tesco’s New Malden supermarket in south London, with room for 12 private desks, 30 co-working spaces and a meeting room.

The deal reflects the number of facilities becoming available in places such as supermarkets, where – for example – there would traditionally be the electronics aisle, but is now one of the quietest areas.

IWG Chief Executive, Mark Dixon, told Bloomberg: “You wouldn’t go there every day, but you’d go there when you don’t want to work from home or a coffee shop, you do want to work with some other people in a site easy to get to.

“It’s a comfortable place to work. It allows focus. You can work in a Starbucks, or almost anywhere else these days, but when you want to do focused work and you don’t want to be at home or commute, it’s the place to work.”

HOW DOES IT WORK?

It’s no secret that the high street has been having issues for some time now and the Covid-19 crisis only exacerbated the issues that already existed.

With the so-called ‘Great Resignation’ still under way, it’s only natural that commercial real estate companies, such as IWG, would try to put quiet retail space to office use, as the need for flexible working rises.

Dixon added: “[The deal] is part of the future. Work is going to be about convenience. Your office is operated by Microsoft or Google and it’s all in the cloud.

“What workers are looking for are convenient places they can drop into work at. Hybrid [working] is working close to home and going into the company’s main office whenever you need to in order to collaborate with people.”

According to Dixon, the dedicated app boasts eight million users who have to pay a small fee to use these spaces.

“We expect to open 1,000 new centres in the following 12 months. All of these are management contracts in the same way that Marriott or Intercontinental hotels manage hotels on behalf of investors or others; we do the same thing.

“Tesco are very good at what they do – we’re the specialists in the provision of the space and most importantly we have a very large app user base that provides the revenue. People that drop in will pay a small amount to do that so it’s a combination.

IS IT LIKELY TO GAIN TRACTION?

According to IWG’s own research 72% of workers would prefer the ability to work flexibly, over returning to the office five days a week.

Dixon said: “People don’t want to spend hours commuting every day and instead want to live and work in their local communities. A Tesco Extra in a suburban location, in the middle of a vibrant local community, is the perfect location for flexible office space.”

What’s more, as much as 30% of the UK office market could be made up of flexible space by 2030, according to property advisory firm JLL.

Coupled with the fact that redundant space in shopping centres, cinemas and even airports is becoming available more frequently, it is not outside the realms of possibility that office workers could dial-in from their local shop in the future.

“These are places that are convenient for people,” Dixon explained. “They have great parking and it’s a great place to work.”