ICSC: European consumers need to learn about growing outlet sector

The retail outlet sector is totally mainstream in the US but the concept is still not fully understood by many European consumers despite making significant inroads in the region.

A survey presented by the International Council of Shopping Centers Europe at its annual conference in Istanbul showed specialised centres, including factory outlets and retail parks, saw like-for-like footfall growth of 6% last year. This compares to just 0.9% for traditional shopping centres.

Alexander Otto, chair of ICSC’s European advisory board and CEO of shopping centre owner-developer ECE Projektmanagement, said the figures reflected a global change involving consumers looking for value. 'In the US, for example, there may be five to six big traditional shopping centres under development in the whole country but there are 30-plus outlet projects under development. There is definitely a trend toward outlet shopping and consumers there are getting more and more used to the format.'

The outlet sector is expanding in Europe, Otto said, 'but in Europe there are a lot of customers who still don't understand exactly what they are and the local press which covers openings of new outlets often don't get it either.'

However, the outlook for the sector remains bright, according to Otto. 'As people get used to them, outlets have a very positive development trend.'

Otto noted that there are only a few outlets under development in Germany. One issue is that the development of an outlet centre can take up to 10 years. 'A lot of companies are trying to do something but in the end about one centre is delivered every three years. In the last few years the pace has been a bit higher.'

Growth could come from expansion. Otto: 'Existing outlets certainly have good prospects and a lot of them will undertake expansion programmes. It is a niche area but it is a very successful niche.'