According to Savills, Factory Outlet Centres (FOC)* have increased in attractiveness in Europe in recent years as many consumers cut back on their purchases of discretionary goods and instead spend more on ‘one-off’ items typically found in outlet stores.
In a recent 2023 survey by ecostra, brands were asked which countries offer the greatest potential for FOCs across Europe. The results show that Germany is the most popular destination, with 46% of brands interested in expanding there in the next three years. This is followed by France (35%), Spain, (29%), the UK (19%) and Italy (19%).
Excess stock created during the pandemic, which retailers were unable to sell, means that outlet stores can offer discount prices for quality goods, says the international real estate advisor. Moreover, compared to shopping centres, they have cheaper running costs and as a result are less exposed to energy costs.
Georgia Ferris, European Research Analyst at Savills, comments: “The attractiveness of outlet centres is in part due to their high performance during periods of economic downturn due to their typical 30-70% discount on goods, offering value for money to an increasingly cost-conscious consumer.
“High-quality design, a wide range of brands and an attractive mix of shopping and leisure have been additional elements of the desirability of FOCs. Furthermore, they are 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, says: “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.
“The mix of well-established, aspirational brands has made these schemes appealing to consumers, drawing visits from extensive catchment areas complimented by services that enhance people's shopping experience and encourage them to stay longer.”
-ends-
*Factory Outlet Centre (FOC) is a term used to describe 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 which also sell goods at a discounted rate. According to Savills definition, a FOC includes a group of at least 10 outlet stores and service establishments gathered within the same centre of all sizes but at least ≥5,000 sq m. Outlet centres are often but not always open-air rather than enclosed shopping centres and are generally located outside a town or a city.