Outlet sector shows growth despite the pandemic - Beyond Retail Industry

DESPITE the economic and pandemic challenges of the past 18 months, the outlet sector has proven a robust performer and Rioja Estates managing director Giles Membrey said three new forces were driving renewed growth in the outlet market and leading them to outperform other retail formats.

He said that outlet sales were 20% up on pre-COVID levels and noted that they are predominantly outdoor sites, which are typically readily accessible by car and as such are seen by shoppers as more COVID-safe.

In addition, the demise of the department store sector in a number of markets, notably the UK, has disrupted a key route to market for brands, which are increasingly turning to outlets as a viable alternative distribution channel.

And finally, the surge in online retailing has been good news for outlets. Many consumers order multiple items only to keep one and return the rest.

The problem for brands is that once items are returned they can no longer guarantee their provenance because they’ve been out of their control. – Giles Membrey, Rioja Estates Managing Director

outlet sector - Malmö Designer Village, set to open in 2025

Malmö Designer Village, set to open in 2025

As a result, they need to be disposed of through the outlet channel, which is driving up stock availability in the malls. “More stock on the shelves makes outlets more attractive to shoppers and encourages repeat visits,” he added.

The UK’s Rioja Estates has unveiled plans for the Malmö Designer Village in Sweden. The 18,000 sq m first phase is expected to start on site in 2022 and open in Q3 2025, with a further phase of 9,000 sq m expected to follow in 2027.

Proximity to the Oresund crossing means its catchment will encompass Copenhagen as well as southern Sweden.

Meanwhile in Lincolnshire in the centre of England, construction is about to begin on Rioja’s new outlet centre at the town of Grantham. Infrastructure works to open up the site – including a new junction on the busy A1 highway – are almost complete and builders will be on site in the first half of 2022 allowing phase-one to open in 2023/4.

Construction is underway on McArthurGlen’s latest European outlet mall, a 20,000 sq m project in Giverny, northwest of Paris. The scheme, located just 45 minutes from Paris and 35 minutes from the tourist magnet of Versailles, is on target to open in early 2023.

The scheme is already 70% let according to the UK company’s group managing director, leasing, Nick Brady. The majority of pre-lets are from McArthurGlen’s roster of 900 existing brand partners and Brady is using MAPIC to source new brands to add a point of difference to the scheme.

And the mall will reflect the growing trend for outlets to evolve into all-round leisure destinations.

Over the years food and leisure have become integral to the outlet mix. It creates another reason for people to come and it encourages them to stay longer. – Nick Brady, McArthurGlen’s group managing director, leasing

outlet sector - McArthurGlen’s European outlet mall project in Giverny

McArthurGlen’s European outlet mall project in Giverny

Emerging markets are also becoming part of the outlets boom. Tbilisi Outlet Village is Georgia’s first-ever outlet project – situated outside the Georgian capital and scheduled to open towards the end of next year.

Some 60% of the space is already leased at the Village, which has been developed by Georgian Outlets & Resort Group (GORG) in collaboration with outlets advisor TORG International.

Georgia is a strongly emerging market and a fashion hotspot at the edge of Europe that many brands are looking at in these turbulent times. We are determined to make Tbilisi Outlet Village the Nº1 outlet in Eastern Europe. – Barbara Horatz, partner, retail and marketing at TORG International

outlet sector - Barbara Horatz: “Determined to make Tbilisi Outlet Village Nº1 in Eastern Europe.” Photo: Yann Coatsaliou

Barbara Horatz: “Determined to make Tbilisi Outlet Village Nº1 in Eastern Europe.” – Photo: Yann Coatsaliou

Tbilisi Outlet Village is expected to attract more than seven million visitors in its first three years, including a significant number of cross-border travellers from Azerbaijan, Armenia, Russia and Turkey. The outlet’s location is just 30 minutes southeast of the capital, on the E60 motorway. It benefits from a catchment made up of Tbilisi’s 1.4 million population in a country of close to four million people.

 

Read also related articles:
The future of outlet malls: Enhancing the omni-channel experience
McDonald’s trials sustainability in retail at Disney net-zero outlet
Amsterdam opening for outlet sector joint venture

 

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About Author

Mark Faithfull is Editor of the MAPIC Preview and News Magazines, as well as Editor of online publication and analysis specialist Retail Property Analyst.

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