Thousands of Royal Bank of Scotland workers asked to stay at home - how will this affect Edinburgh businesses?

On Monday RBS revealed that it has asked its some 50,000 employees to remain home for the remainder of 2020, a decision that may be adversely affecting the cafes, lunch spots and other key retailers near their branches who rely on the spending of office workers to keep their tills ringing.

The decision reflects a larger issue occurring in Edinburgh’s city centre as many small businesses struggle to keep afloat without their key demographic of office workers.

A lack of tourism and students is also contributing to the dwindling business and dramatic loss of revenue, which has been affecting shop owners since March.

Hank’s Sandwich Bar in Fountainbridge is one of the businesses hit by people staying home. A hot-spot for lunch breaks not six months ago, Hank’s is experiencing a severe decline in sales due to the impact of the coronavirus pandemic.

Owner Dave Clayden, who took over the business amid growing prospects last year, said: “We would do about 120 to 150 rolls a day and we essentially saw that evaporate overnight, probably about three or four days before lockdown when a lot of the businesses started to actively tell staff to work from home.”

A spokesperson at Machina Espresso had had similar things to say. The cafe’s limited menu has had an impact on sales, but ultimately the lack of patrons are to blame for poor business.

Fortunately, the cafe’s online shop is thriving as people stock up to stay home.

The spokesperson said: “We’re selling a limited coffee menu and we’re selling just cake really, so we aren’t doing the food stuff we normally do so that’s naturally had an impact. None of the usual groups like students, tourists, and office workers and really here. We’re lucky because we’re not reliant on the cafe, it’s about a third of our business. We have the roastery online equipment which has gone the other way, so we’re really grateful for that.”

Machina Espresso’s sudden popularity online may mark a turning point in the way we approach hot drinks as consumers.

A recent statistic from Kantar shows that there’s been a £24 million increase in tea and coffee sales from supermarkets in the past four weeks. This is easily attributed to the number of people now working from home, a trend Edinburgh Napier University’s Dr Piotr Jaworski says could be permanent, though it is too soon to tell.

The lecturer in economics said: “We need to ask if this change is here to stay or if it’s just a disturbance. In the short term, small businesses are going to have much lower demand, but we need to ask about the medium term and the long term and what the government should do.

“If we think everyone will come back to work by the end of the year and we go back to the old way of doing things, the answer is to try and help the businesses survive. But we don’t know if people are going to change the way they behave with coffee and everything else.

“Maybe we will prefer to work from home, or just go to the office a couple of times a week.”

Thom Kenrick, head of social strategy at RBS, has been working from home since the start of lockdown and has seen his spending on hot beverages plummet.

He said: “I tended to take my packed lunch to work with me, but teas or coffees, those sorts of things, I’d buy from the on site cafes. Since lockdown, I’ve tended to just make myself a cup of tea at home.”

A possible upside to residents working from home is that neighbourhood establishments might see an increase in business.

Kenrick may be boiling the kettle from home, but he ventures to his local shops in Greenbank when he finds himself craving more. He also hopes to start supporting the cafes in his area once his children are back on a normal schedule.

He said: “Since lockdown, my local Margiottas has become the source of many last minute snacks or lunches or whatever it is the kids are asking for.

“Similarly, as things are easing off, a few of my colleagues that live in the local area have agreed that when the schools go back we’ll have catch ups in the coffee shops in Morningside and have a work chat.”

Meanwhile, bucking the downward trend, the Baguette Bar in Bonnyrigg has seen a small spike in business.

Owner James Cormack isn’t sure if it’s because children are off school and pestering their parents for cash to spend or because so many people are working from home, but he’s happy to see positive sales after so many months of uncertainty.

He explains that he’s receiving his usual number of customers but that they’re ordering more food than before.

James said: “We’ve been reopened for about eight weeks and sales were high for the first five weeks. Now the footfall is back to normal but the order values are higher. That would suggest there’s probably more people home.”

Dr. Jaworski says the circumstances of the demand are the variables that will determine the long term outcomes of Edinburgh’s small businesses.

He said: “We need to analyse what people are doing because it gives practicality to the cause of demand. We are staying at home so more food is ordered from home. When we go back to work, less food will be ordered and if we stay working from home, the trend of getting takeaways might go on.”

It is uncertain whether Edinburgh businesses are in a state of transition to a new normal, or if what they’re experiencing is a temporary abnormality.

If more of the Capital’s major employers follow in the footsteps of RBS in advising workers to stay home until 2021, the answer could still be several months away.