The European market for Factory Outlet Centres (FOC) is thriving as consumers prioritize "one-off" items found in outlet stores. Savills, a real estate consulting firm, reveals that Germany is the top target nation for retailers expanding their outlet offerings. Outlet centers' success depends on factors like available stock, favourable locations, and diverse brand offerings. They offer an alternative shopping experience that complements e-commerce while providing tangible benefits. The expansion of FOCs in Germany, France, Spain, and the UK reflects the demand for affordable yet high-quality products and their resilience in the evolving retail landscape.
The European market for Factory Outlet Centres (FOC) is experiencing significant growth, as consumers shift their spending from discretionary goods to "one-off" items typically found in outlet stores, according to a report by Savills, a global real estate consulting firm.
Savills' report identifies Germany as the top target nation for retailers and brands looking to expand their outlet offerings. In a poll conducted by ecostra, brands were asked which European countries hold the most potential for FOCs, and 46% of them expressed interest in expanding in Germany over the next three years. France ranked second with 35%, followed by Spain with 29%, the UK with 19%, and Italy with 19%.
The term "Factory Outlet Centre" encompasses both conventional outlet malls, which sell unsold merchandise from brands at discounted prices, and designer malls, which feature high-end or luxury labels offering their products at reduced prices.
Savills suggests that outlet stores are able to offer substantial discounts on high-quality products due to excess stock resulting from the impact of the pandemic. Additionally, their location outside city centres allows for lower operating costs and less sensitivity to energy expenses.
Georgia Ferris, European Research Analyst at Savills, explains that the popularity of outlet centres is partly due to their strong performance during economic downturns. Their customary discounts ranging from 30% to 70% off merchandise provide value for money to cost-conscious consumers. Ferris also notes that outlet centres have been relatively insulated from the rise of e-commerce, as the discounts are typically only available in-store.
The expansion of FOCs in Germany, France, Spain, and the UK aligns with the growing demand for affordable yet high-quality products. Outlet centres offer consumers an opportunity to access popular brands at discounted prices, making them an attractive shopping destination.
It's worth highlighting that the success of outlet centres relies on a combination of factors, including the availability of excess stock, favourable location, and a diverse range of brands. These factors contribute to the unique shopping experience offered by outlet centres, attracting both local shoppers and tourists looking for deals on well-known brands.
As the retail landscape continues to evolve, outlet centres have proven to be resilient and adaptable. They provide an alternative shopping experience that complements the convenience of e-commerce while offering the tangible benefits of in-person shopping, such as the ability to try on clothing and experience the brand ambiance.
The expansion of Factory Outlet Centres in Germany, France, Spain, and the UK reflects the growing popularity of these retail destinations among cost-conscious consumers seeking high-quality products at discounted prices. As the market continues to evolve, outlet centres are expected to remain a key player in the retail industry, offering a unique shopping experience and contributing to the overall growth of the European retail market.
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