Germany, France, Spain and the United Kingdom are among the most sought after destinations for expanding outlets

Outlets are thriving in Europe as “many consumers are reducing their purchases of discretionary goods and instead spending more on ‘unique’ items typically found in retail stores,” a new study by Savills shows.

The report states that Germany is the main target country for retailers and brands wishing to expand their POS offerings.

In a survey (conducted by Equestra), brands were asked which countries offer the greatest potential for outlets across Europe. 46% of them said they are interested in expanding to Germany in the next three years. It is followed by France with 35%, Spain with 29%, the United Kingdom with 19% and Italy also with 19%.

However, the figures for Germany and France were lower than the previous year, while Spain, the United Kingdom and Italy received more attention in 2022 than in 2021.

For Savills, the FOC (Factory Outlet Centers) outlet includes both traditional outlet centers that sell unsold inventory of brands directly to consumers at a discount, and designer outlets made up of luxury/luxury brands that also sell discount products.

At the higher end, this translates to centers like Bicester Village in Britain, where names like Dior, Gucci, Prada, Burberry and Moncler are among the brands that make the center one of the UK’s top tourist destinations.

The international real estate consultant says the excess inventory generated during the pandemic, which retailers have been unable to sell, means retail stores can offer good discounts on quality items. In addition, being outdoors and located outside of town, they have lower operating costs and are less exposed to energy costs.

Georgia Ferris, European research analyst at Savills, says the outlets’ appeal is partly due to their higher performance during economic downturns, given their typical 30-70% discount on merchandise, allowing them to “offer good value for money to the increasingly cost-conscious consumer.” .

But its appeal clearly goes further than that, as this sector has been thriving for some time, with consumers looking for “quality design, a wide range of brands and an attractive mix of shopping and entertainment”, regardless of the economic climate..

Ferris added that the outlets were also “relatively sheltered from the e-commerce boom, as discounts are usually only available in stores.”

“The sector has been popular with both shoppers and tourists alike, which has led to more international retailers looking to include outlets in their strategy,” added Larry Brennan, European retail agency director at Savills.