In January 2021 internet sales as a percentage of all retail peaked at 37.8%. By spring 2023 it had fallen back down to 25% [1]. This trend reversal has led some commentators to suggest that warehousing demand is falling – but the reality is far from the case.

Research[2] by Iceni on behalf of the South East Midlands Local Economic Partnership (SEMLEP) finds there could be a need for up to double the existing warehousing space over the next 20 years, even after taking into account for recycling of some existing stock. Areas such as the Midlands, that host major motorway routes, are likely to see ongoing significant demand for spaces.

The need for new warehousing is driven by a number of factors. In part there is a significant backlog of occupiers seeking space due to continuing low vacancy rates. There is also a need to replace older stock, which may not have the sustainability credentials, height, scale and access to power and road network that many modern occupiers require. In terms of sectors, whilst e-commerce growth has slowed, it still remains significantly above the pre pandemic position.

So how can we ensure that we are properly planning for warehousing? The consultation on changes to the NPPF has focused on changes to the way in which housing need may be calculated. As a result 26 local authorities (at last count) have paused or delayed their local plans. But this doesn’t just affect housebuilding, it means that planning for employment space including warehousing gets put on hold. With national economic headwinds and high inflation – that make building anything increasingly costly – further delays will be hampering economic growth.

And what of the economic benefits of delivering warehousing? Research released by Prologis[3] in May 2023 finds that the logistics and supply chain sector in the UK employs over 2 million people (approximately 7% of the national workforce); that employees within the logistics and supply chain sector are earning above the median average salary across industries; and that 66% of logistics employees stating that they ‘love’ their chosen career. In terms of the skill sets in the sector, Iceni’s SEMLEP work found that in 2021, 65% of logistics job postings accounted for technical roles (i.e. non-drivers and handlers/warehouse associates) with a focus on project managers, sales managers, supply chain analysts and software developer/engineers.

Iceni is involved with a series of major industry studies related to warehousing demand around the UK. We provide objective, robust, reliable evidence and insights to support plan-making and development proposals. Get in touch to discuss your project queries.