Germany, France, Spain and UK are top of wishlist for outlet centre expansion

Germany, France, Spain and UK are top of wishlist for outlet centre expansion

Factory Outlet Centres (FOC) are booming in Europe as “many consumers cut back on their purchases of discretionary goods and instead spend more on ‘one-off’ items typically found in outlet stores,” a new study from Savills

Bicester Village

And it said Germany is the top target country for retailers and brands seeking to expand their outlets offer.

For a survey (conducted by ecostra), brands were asked which countries offer the greatest potential for FOCs across Europe. And 46% of them said they’re interested in expanding in Germany in the next three years. This was followed by France on 35%, Spain on 29%, the UK on 19% and Italy also on 19%.

But for Germany and France, the figures were lower than the year before, while Spain, the UK and Italy were all seeing stronger interest in 2022 than in 2021.

For Savills, an FOC refers to both traditional outlet centres that trade unsold stock from brands directly to consumers at a discount and designer outlets made up of premium/luxury brands that also sell goods at a discounted rate. 

At the very top end, this means centres like the UK’s Bicester VillageDiorGucciPradaBurberryMoncler

The international real estate advisor said that excess stock created during the pandemic, which retailers were unable to sell, means that outlet stores can offer good discounts on quality goods. And usually being open air and located out town, they have cheaper running costs with less exposure to energy costs.

Georgia Ferris, European Research Analyst at Savills, said that the attractiveness of outlet centres is in part due to their high performance during periods of economic downturn given their typical 30%-70% discount on goods that sees them “offering value for money to an increasingly cost-conscious consumer”.

But they clearly have an appeal beyond this as the segment has been booming for some time with consumers focused on “high-quality design, a wide range of brands and an attractive mix of shopping and leisure,” regardless of the wider economy.

Ferris added that outlet centres have also been “relatively shielded from the rise of e-commerce as, generally, discounts are only available in-store”.

Larry Brennan, Head of European Retail Agency at Savills, added: “The sector has been popular both with shoppers and tourists, which has resulted in an increasing number of international retailers looking to include outlet centres in their strategy.”

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