Page 39 - September 2020

SPECIAL FEATURE: INTERNATIONAL OUTLET CENTRES

Outlets post Covid-19

We are clearly living through unprecedented times

and the impact on the retail property industry,
along with many other sectors, is enormous. Here,

Giles Membrey, Founder & Managing Director of
Rioja Estates discusses how he believes the outlet
sector has fared and what lies ahead for the sector? GUNWHARF QUAYS
Portsmouth, UK

t has been difficult in general for the retail property Outlets have always attracted spending consumers in CACI has researched all types of leisure activities (visits to indeed with just turnover rent with a ratchet clause, so this
industry. However, unlike full price shopping centres, this way and outlet shoppers are a tenacious bunch. Since high streets and shopping centres, parks, restaurants, cities) de-risks the deal for the brands, aligns the interests of the
outlets are a destination; consumers visit an outlet lockdown, we are seeing this same dynamic as consumers and concludes that there has been a shift in habits from landlord and tenants and offers brands greater flexibility. This
Ivillage with a purpose, mostly to have a good day return, which means that lower footfall levels are less of an pleasure to purpose. It is important that the outlet and retail is something all brands want and need right now.
out with family and friends, to relax, to shop and to issue than in high streets and shopping centres. Significantly sector look at ways of making visits fun again. This is not easy We are confident that good outlet villages will emerge
have fun. They go with an amount to spend from their Covid-19 is reshaping the way that shoppers are able to buy, with social distancing, the wearing of facemasks and hand stronger from this crisis. Before Covid-19 there was already
discretional leisure budget. The conversion of outlet online shopping is surging, growing by up to 129 per cent sanitising, but it is an important factor going forward. a clear focus in outlet development to create vibrant retail
visitors into spending customers ranges from 80 per cent week-on-week, creating surplus stock which in turn increases The pandemic has made all outlet developers review their and leisure destinations rather than traditional shopping
to 140 per cent, which means that nearly every consumer sales through brand outlet stores. Also, we are seeing that projects and reflect on what needs to change in both design destinations. With a drop in international tourism countered
makes at least one purchase. Outlets offer a combined consumers are spending more. Outlets are well placed to and operations to keep outlet staff and visitors safe. These by a rise in staycations and staying local, UK outlets can
leisure and shopping experience. We are already seeing make the most of a higher spend; tempting customers with changes range from measures to make sanitation easier, to definitely attract UK customers and tourists with their strong
that they will continue to attract shoppers during these great brands at good prices to continue growing sales and enabling more comfortable social distancing, with distance brand value and open-air leisure proposition. UK tourists
challenging times. Consumers are now looking more for rental income despite social distancing and reduced capacity. indicators in paving, extended weather protection and will be looking to do more outdoor pursuits, benefiting
leisure on their doorsteps, so local catchments are proving Outlets offer a combined leisure and shopping virtual queuing systems. In addition, operators are looking at the outdoor sector, which is already a strong category in
to be more important than they were before Covid-19. experience. We are already seeing that they will continue to scheme-branded online transactional platforms. outlets. There will be a change in the way people dress to
According to data from CACI, the requirement to work attract shoppers during these challenging times. Consumers Many brands are telling us that since opening in mid-June, match the changes in work habits. Dress down Friday may
from home and the fear of public transport has reduced are now looking for leisure on their doorsteps, so local their outlet stores are playing a key role as part of an omni- well become dress down Wednesday, Thursday and Friday.
visits to city centres by 20 per cent. 55 per cent of catchments are proving to be more important than they channel strategy. Outlets can be highly profitable for the Outlets are particularly strong in the athleisure, casual wear
consumers are visiting local high streets for non-essential were before Covid-19. brands that approach their outlet business as a dedicated and sports categories, this will give consumers the types of
retail versus only 16 per cent going to cities. Outlets with Open-air villages have more appeal than indoor shopping channel, with a clearly thought out stock and promotional clothes to match a more relaxed lifestyle. With the squeeze
strong local catchments are already benefitting from these centres. From a safety point of view, it has been drilled into strategy. Outlet landlords are used to working with a on household budgets, outlets also give customers what they
new behaviours. the national psyche that we are safer outdoors than indoors. combined base rent and turnover rent deal structure, or want at an affordable price.

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