The European outlet centre industry is still set to outpace traditional retail in terms of growth, but operators and retailers will need solid business plans to differentiate in the future, delegates heard at the ICSC European Outlet Conference which was held on Thursday during the ICSC European Conference in Barcelona.
‘There are limited new locations for developing outlet centres in Europe, so we need to focus on the places that we have, working out how to help them evolve,’ said Charlotte Ashworth, fund manager at TH Real Estate. ‘The reality is, we can’t just put them where we’d like to.’
Ken Gunn, managing director, FSP retail, said the industry was in rude health.
‘Western Europe is still prime territory for outlet centres, representing 47% of total sales across the Continent,’ he said. ‘Provision is lower in Central Europe, reflecting the low purchasing power of the populations, although that population will grow more affluent over time.
‘Southern Europe has seen rapid growth, but we are at a point where the amount of schemes relative to local population has reached capacity. The region represents a significant portion of European total spend at 35%. But there are still opportunities there, and they all demand innovation, just as in the north.’
Millennial focus on experience
Part of the industry’s evolution will also involve encouraging the next generation of shoppers, panellists said. ‘Millennial shoppers are very much focused on experience, on how they feel in a place, so that aspect Is increasingly important,’ said Jack Busby, portfolio director at Landsec.
‘We’ve got to bring in younger brands, try pop-ups, and maybe also think about how we can reposition the outlets in terms of transport. At our new venture in Malaga, customers will be able to arrive by train. That will attract a different demographic,’ said Michael Natas, joint managing director of development at McArthurGlen Group, referring to the group’s pipeline joint venture with Sonae Sierra.
Branding can also help. ‘McArthurGlen is a 25-year old brand, and it’s not the easiest name to pronounce, particularly for some of our European partners,’ Natas added. ‘But it’s so we’ll known… At this stage, I don’t think we’re going to change it, although we have thought about it in the past.’
The scheduling of former stand-alone event ICSC European Outlet Conference has changed in recent years. It skipped a year in 2017, after being held alongside ICSC’s ReCon Europe in 2016. ‘That didn’t work,’ said Bill Kistler, executive vice president and managing director of EMEA at ICSC. ‘We didn’t feel that the synergies were strong enough. The synergies are much stronger with the annual European Conference, hence the decision to bring the two events together.’
The initiative is part of a bigger drive on ICSC’s part to hold fewer annual conferences, but to stage bigger events with more impact for members, according to Kistler.
